Attorney General Opinions

Certain Attorney General Opinions relating to the subject of taxation the Department feels would be of interest to you are listed below.

NOTE: These opinions may no longer represent the opinions or views of the Department or the Attorney General of the State of Hawaii or may have been superseded by subsequent changes in the Hawaii Revised Statutes.

[ Adjustments ] [ Airport Capitation Tax ] [ Appeals ] [ Assessment ] [ Bank Excise Tax ] [ City & County ] [ Collections ] [ County Vehicular Taxes ] [ Delinquent Tax ] [ Enterprise for Profit Tax ] [ Exemption ] [ Foreign Trade Zone ] [ Franchise Tax ] [ Fuel Tax ] [ General Excise Tax ] [ Income Tax ] [ Inheritance Tax ] [ Liquor Tax ] [ Military Reservation ] [ Motor Vehicle Weight Tax ] [ Mutual Insurance Tax ] [ National Banks ] [ Natural Disaster Tax Relief ] [ Net Income Tax ] [ Personal Property Tax ] [ Poll Tax ] [ Property Tax ] [ Public Utilities ] [ Public Welfare Tax ] [ Refund of Illegal Taxes ] [ Refunds ] [ Tax Clearance ] [ Tax Collection ] [ Tax Lien ] [ Tax Rate ] [ Tobacco Tax ] [ Transient Accommodation Tax ] [ Unemployment Tax ] [ Use Tax ]

Adjustments

Opinions of the Attorney General – Adjustments, by Date
Date	Number	Category	Description
11/01/1926	1390	Adjustments	TAXATION; COMPROMISE; BOOKKEEPING ENTRIES Compromise taxation adjustments should not be entered as delinquent uncollectible taxes, but as adjustments by court order or compromise. TAXATION; ADJUSTMENTS EFFECT ON RATES Adjustments in assessments should not affect the tax rate.

Airport Capitation Tax

Opinions of the Attorney General – Airport Capitation Tax, by Date
Date	Number	Category	Description
04/10/1969	69-7	Airport Capitation Tax	TAXATION; CONSTITUTIONALITY

Appeals

Opinions of the Attorney General – Appeals, by Date
Date	Number	Category	Description
07/19/1918	719	Appeals	TAXATION; TAX APPEAL; RETURN OF COSTS Costs deposited with the Tax Assessor on an appeal to the Tax Appeal Court should not be returned to the Taxpayer, in whole or in part, except upon a judgment of the Tax Appeal Court as provided for by Section 1278, R.L.H. 1915.
10/19/1917	693	Appeals	TAXATION; TAX APPEAL; COSTS OF COMPROMISE In the event of a compromise of a tax appeal before trial, there shall be returned to the appellant, from the costs deposited, a part thereof proportionate to the amount for which the appellant shall prevail.
07/29/1916	537	Appeals	TAXATION; TAX APPEALS Return of costs.
05/20/1916	518	Appeals	TAXATION; TAX APPEALS; TIME TO APPEAL The statutory limitation upon tax appeals may not be waived by an executive officer. Tax appeals must be filed on or before May 1st.

Assessment

Opinions of the Attorney General – Assessment, by Date
Date	Number	Category	Description
07/11/1935	1621	Assessment	TAXATION; REDUCTION OF ASSESSMENT Once the tax roll is prepared and filed the Tax Commissioner is without power to make any reduction, for any cause, in an assessment; such power rests only in the Auditor and Attorney General and the courts. SAME; REFUND OF TAXES After a tax has been paid no refund can be made, and a deduction of such amount from taxes payable for the following year is void as an indirect attempt to do something that cannot be done directly.
09/10/1928	1495	Assessment	TAXATION; STATUTORY CONSTRUCTION Where one section of a statute treats specifically and solely of a matter that section prevails in reference to that matter over other sections in which only incidental reference is made thereto. All statutes relating to the same subject matters should be reconciled, if possible. SAME; ASSESSORS AND DEPUTIES Under Chapter 102, R.L. 1925, the tax assessor, with the approval of the treasurer, may appoint as many or as few duties as in their opinion may be required properly to perform the duties of assessing and collecting the taxes.
01/11/1927	1408	Assessment	TAXATION; PENSION FUND FOR TEACHERS The Treasurer of the Territory, in making up his estimates of funds necessary to meet school teachers’ payroll, should take into consideration the number of teachers, the estimated increase on account of increases in enrollment–not to exceed 7.5 percent, and the amount payable by the Territory to the Employees’ Retirement System on account of members whose salaries are paid from school funds.
11/01/1926	1389	Assessment	TAXATION; ASSESSMENTS; CORRECTION OF ERRORS The Tax Assessor may correct errors in assessments, even after May 1, by way of equitable adjustment or compromise, if such correction is not prejudicial to the taxpayer.
11/19/1925	1284	Assessment	TAXATION; ERRORS IN ASSESSMENTS The Assessor may correct errors in assessments, if such correction be not prejudicial to the taxpayer, after May 1st.
02/26/1925	1204	Assessment	TAXATION; ASSESSMENT UPON OMITTED PROPERTY Where assessment ar made upon property omitted from the assessment or tax lists of previous years, (1) the taxes are not to be considered delinquencies in paying taxes which had not been assessed, (2) the property placed upon each year’s list should be subjected to the tax rate of that year, and (3) the amounts received as taxes pursuant to the assessments made upon omitted property should be retained by the Treasurer to satisfy the requirements of each county or city and county for the next following year.
05/25/1922	1020	Assessment	TAXATION; NOTICE OF RAISE IN ASSESSMENT The notice of raise in assessment must be served on the taxpayer as provided by Section 1268, R.L.H. 1915, as amended, and errors in the notice must be corrected, if at all, on or before the 10th day of April in each year. if at all, on or before the 10th day of April in each year.
12/22/1920	954	Assessment	TAXATION; LIEN ON GROWING CROPS Taxes assessed against a growing crop constitute a lien on said crop pursuant to Section 1291, R.L.H. 1915.
10/09/1920	947	Assessment	TAXATION; REFUND OF TAX PAID UNDER AN ILLEGAL ASSESSMENT A taxpayer cannot maintain an action for the recovery of an amount of tax paid under an illegal assessment except upon a compliance with Section 1392 of the Revised Laws of Hawaii, 1915, nor may the amount of such tax be refunded to him by the Treasurer or Tax Assessor.
04/19/1916	510	Assessment	TAXATION; ASSESSMENTS OF LEASED LANDS Assessment of different interests in leased property must be made separately irrespective of lease agreement provision providing that lessee is liable for taxes.

Bank Excise Tax

Opinions of the Attorney General – Bank Excise Tax, by Date
Date	Number	Category	Description
10/20/1955	55-94	Bank Excise Tax	BANK EXCISE TAX; TAXABILITY, FOREIGN CORPORATION MAKING AND SERVICING LOANS Foreign corporation incorporated as a bank in the state of New York which does not conduct banking activities in the Territory other than the making and servicing of loans is not subject to bank excise tax imposed by Chapter 97 of the Revised Laws of Hawaii (1945).

City & County

Opinions of the Attorney General – City & County, by Date
Date	Number	Category	Description
01/19/1926	1300	City & County	TAXATION OF INTEREST ON TERRITORIAL BONDS A county or city and county is exclusively liable for interest upon Territorial bonds, the funds from which have been allocated to its use only from the time such funds have been earmarked for some definite project of such county or city and county.
03/25/1919	819	City & County	TAXATION; MONEY IN HAND IN BANKS Under the provisions of Sections 1165 and 2215 of the Revised Laws of Hawaii 1915, Territorial, County and City and County funds on deposit with banks are not taxable as “moneys in hand” in such banks. TAXATION; SPECIAL INCOME TAX
01/29/1916	487	City & County	TAXATION; APPROPRIATION TO COUNTY Where the legislature has appropriated for the city and county a certain sum from loan funds, which appropriation was made after the tax rate for the appropriation year had been determined, the amount of interest and sinking fund retained by the auditor on account of said sum during the appropriation year should be included in the tax levy for the ensuing year.

Collections

Opinions of the Attorney General – Collections, by Date
Date	Number	Category	Description
02/18/1937	1651	Collections	TAXATION; DELINQUENT TAX BUREAU, NATURE AND PURPOSE The delinquent tax bureau is a bureau created for the administration and collection of delinquent taxes. It is not authorized to administer or collect current taxes. Delinquent taxes are such assessed taxes as remain unpaid after the time set by law for their payment. The collector of delinquent taxes and his assistants do not, by virtue of their appointments, possess the powers of collectors or assistant collectors appointed under section 1906, R.L. 1935, or of assessors or assistant assessors and are only authorized to administer and collect delinquent taxes. Officers are incompatible and may not be held by the same person when their functions are inconsistent, their performance resulting in antagonism and a conflict of duty so that the incumbent of one cannot discharge with fidelity and propriety the duties of both. When collected and after the deduction of the amounts payable into the delinquent tax bureau expense fund, delinquent taxes,if a county realization, are payable to the county in accordance with sections 1921-1922, R.L. 1935, as amended, and if a territorial realization, are posited in the general fund of the Territory. The office of supervisor of the County of Hawaii and the office of assistant to the delinquent tax bureau (if an office) are not incompatible offices and one person may hold both offices at the same time.

County Vehicular Taxes

Opinions of the Attorney General – County Vehicular Taxes, by Date
Date	Number	Category	Description
05/17/1967	67-17	County Vehicular Taxes	COUNTY VEHICULAR TAXES; UNIFORMITY OF MOTOR VEHICLE NUMBER PLATES Motor vehicle number plates must be uniform in all respects, including the reflective material on the plates.

Delinquent Tax

Opinions of the Attorney General – Delinquent Tax, by Date
Date	Number	Category	Description
05/22/1939	1708	Delinquent Tax	DELINQUENT TAX BUREAU; EXPENSE FUND Taxes may become delinquent during the year of assessment if not promptly paid upon the date due, and the delinquent tax bureau is entitled to 25% of the collection made of such delinquent taxes.
02/01/1926	1307	Delinquent Tax	DELINQUENT TAXES; PUBLICATION Act 229, S.L. 1925, eliminates the necessity of publishing delinquent tax lists.

Enterprise for Profit Tax

Opinions of the Attorney General – Enterprise for Profit Tax, by Date
Date	Number	Category	Description
04/23/1919	826	Enterprise for Profit Tax	ENTERPRISE FOR PROFIT TAX; DEDUCTIONS In estimating income as one factor in determining the value of the property of an enterprise for profit, the Federal war tax or excess profit tax should not be deducted therefrom.

Exemption

Opinions of the Attorney General – Exemption, by Date
Date	Number	Category	Description
11/03/1941	1787	Exemption	TAXATION; EXEMPTIONS; GENERALLY The allowance of tax exemptions is a matter of legislative policy and there is no moral obligation to allow such exemption.
11/03/1941	1787	Exemption	STATUTES; VALIDITY; PARTIAL INVALIDITY A statute which makes a retroactive tax exemption as to taxes already due and payable, and provides for refunds to persons who have paid, which refunds cannot legally be made, is also invalid insofar as it provides for the cancellation of the tax delinquencies of those who have not paid, since this provision is not severable from the refund provision.

Foreign Trade Zone

Opinions of the Attorney General – Foreign Trade Zone, by Date
Date	Number	Category	Description
09/22/2021	21-01	Foreign Trade Zone	FOREIGN TRADE ZONE; HAWAII GENERAL EXCISE TAX AND USE TAX ON ACTIVITIES OCCURRING WITHIN THE HAWAII FOREIGN-TRADE ZONE (FTZ) AND SUB-ZONES Federal preemption of state law can occur in three ways: (1) express preemption by statute; (2) occupation of the field to the exclusion of state law; or (3) a conflict between state and federal regulation. Hawaii’s General Excise Tax and Use Tax are not expressly preempted by the Foreign Trade Zones Act (FTZA). Congress has not assumed exclusive regulatory powers with respect to FTZ5 such that all state taxation is preempted. Conflict Preemption applies as a barrier to certain, but not all, state taxes on activities in an FTZ. The FTZA does not expressly preempt the State from imposing general excise and use tax on activities conducted within an FTZ. Moreover, Congress has clarified, by way of an amendment in 1984, that it did not intend to occupy the entire field with respect to FTZs such that all state taxation would be preempted. Ultimately, whether a state tax can be applied to a particular activity within an FTZ depends on whether the tax conflicts with the purposes and objectives of the FTZA. Although Opinion No. 64-52 has been superseded, the answers to the specific questions posed therein may still be valid if the answers would be the same upon completion of a conflict preemption analysis.
11/05/1964	64-52	Foreign Trade Zone	(Opinion 64-52 superseded by Opinion 21-02) GENERAL EXCISE TAX; SALES MADE WITHIN FOREIGN TRADE ZONE Corporation engaged in business within the foreign trade zone which sells goods to another corporation engaged in business within the zone for purposes of re-export (where title to the goods passes in the zone and the purchaser accepts the goods in the zone) is not liable for general excise taxes on such sales as the State of Hawaii’s taxing jurisdiction does not extend to persons operating within the zone. SAME; FOREIGN TRADE ZONE; SALES OF GOODS TO HAWAII BUYERS Corporation which does not maintain office in the State of Hawaii and is otherwise not engaged in business in the State of Hawaii which sells goods within zone to a Hawaii buyer, who in turns resells those goods in the State of Hawaii, is not liable for excise tax because the State of Hawaii cannot extend its taxing power to persons operating within the zone. However, the Hawaii buyer who in the ordinary course of business makes a subsequent sale of the imported goods to another purchaser in the State of Hawaii is subject to general excise tax on such sale. SAME; SAME; SALES MADE IN FOREIGN COUNTRY OR ANOTHER STATE Sales of goods by a corporation engaged in business in the foreign trade zone to a purchaser in a foreign country or in another state are not subject to general excise tax because the sales are outside the taxing jurisdiction of the State of Hawaii.

Franchise Tax

Opinions of the Attorney General – Franchise Tax, by Date
Date	Number	Category	Description
03/29/1965	65-8	Franchise Tax	FRANCHISE TAX; FEDERAL HOME LOAN BANKS A Federal Home Loan Bank is not a National Bank. Therefore, dividends from a Federal Home Loan Bank should be included in a Bank or other Financial Corporation’s gross income.

Fuel Tax

Opinions of the Attorney General – Fuel Tax, by Date
Date	Number	Category	Description
02/16/1961	61-27	Fuel Tax	FUEL TAX; SALE OF BONDED FUEL TO AIRCRAFT BOUND FOR FOREIGN PORTS
08/23/1957	57-89	Fuel Tax	FUEL TAX; TAX RATE ON JET FUEL; WHETHER “JET FUEL” IS GASOLINE Taxability under fuel tax law of jet fuel used in aircraft prior to the effective date of Act 217 Amendments (S.L. 1957). If the jet fuel constitutes gasoline within the meaning of the law, the rate of tax is 31/2%. If the fuel is not gasoline, the rate is 81/2%.
08/13/1957	57-85	Fuel Tax	FUEL TAX; FILING REQUIREMENT OF DISTRIBUTOR Distributors of fuel must file report with Tax Commissioner and pay fuel tax within 30 days after the end of the calender month in which the fuel was sold. SAME; DEFINITION OF RETAIL DEALER The definition of “retail dealer” makes no distinction between types of liquid fuel and includes a person who purchases fuel from a licensed distributor and sells it for use in small water craft or private airplanes.
04/03/1957	57-30	Fuel Tax	FUEL TAX; APPLICABILITY TO GAS SOLD BY POST EXCHANGE ON MILITARY RESERVATION TO AMERICAN RED CROSS If proof can be made that the American National Red Cross purchased gasoline for use within the scope of its employment by the U.S. Armed Forces, the sale of the gasoline will be exempt from application of the fuel tax.
11/21/1941	1792	Fuel Tax	FUEL TAX; SAME Sales to the United States are specifically exempted from fuel tax by the statute itself.

General Excise Tax

Opinions of the Attorney General – General Excise Tax, by Date
Date	Number	Category	Description
10/17/1994	94-2	General Excise Tax	GENERAL EXCISE TAX; USE TAX; ORIGINAL PACKAGE DOCTRINE Attorney General Opinion No. 64-38 is overruled. The general excise and use taxes may be applied to imported goods, no longer in transit, regardless of whether the imported goods are in their original packages.
04/24/1968	68-6	General Excise Tax	TAXATION; LEGAL EFFECT OF HOUSE RESOLUTION DIRECTED TO DEPARTMENT OF TAXATION DIRECTOR House of Representatives resolution requesting the Director of the Department of Taxation to administer general excise tax law in certain manner and to refund taxes collected is without force of law.
03/06/1968	68-2	General Excise Tax	GENERAL EXCISE TAX; EXEMPTION; CO-OPS Section 117-21(p), R.L.H. 1955, as amended, exempts from the application of general excise tax law amounts received by cooperative housing corporations from its shareholders in reimbursement of funds paid by the corporation for the expenses of operating and maintaining the cooperative land and improvements.
05/11/1966	66-16	General Excise Tax	GENERAL EXCISE TAX; SALES OF TANGIBLE PERSONAL PROPERTY MADE TO NATIONAL BANKS NOT SUBJECT TO TAX
11/29/1965	65-29	General Excise Tax	GENERAL EXCISE TAX; SALES OF TANGIBLE PERSONAL PROPERTY MADE TO FEDERAL CREDIT UNIONS NOT SUBJECT TO TAX
04/21/1965	65-13	General Excise Tax	GENERAL EXCISE TAX; PROHIBITION AGAINST VISIBLE PASS-ON OF THE GENERAL EXCISE TAX IN VARIOUS RETAIL ACTIVITIES Legislation which prohibits a retail seller from visibly passing-on general excise taxes to buyers is legally valid and will not affect the application of general excise tax on the gross receipts of the sale, including any portion attributable to the tax.
03/15/1965	65-6	General Excise Tax	GENERAL EXCISE TAX; TAXABILITY OF TRAVEL AGENTS The Hawaii general excise tax, as applied to travel agents, is measured by the amount of commissions earned for services rendered to travelers.
07/21/1964	64-38	General Excise Tax	(Opinion overruled) GENERAL EXCISE TAX; ORIGINAL PACKAGE DOCTRINE The importer of bottled liquor packed in cases is not subject to the general excise tax upon the sale of those cases to buyers in Hawaii. The original packages, in the instant case, are the cases in which the bottled liquor is contained. Goods in their original packages lose their characterization as imports after the first sale by the importer of the goods in their original packages or after the original packages are broken.
02/25/1964	64-9	General Excise Tax	GENERAL EXCISE TAX; APPLICATION OF WHOLESALE RATE; INTERMEDIARY SERVICES; HAULING CONTRACTOR A hauling contractor which hauls for another hauling contractor under a subcontract arrangement is not entitled to be taxed at the wholesale rate applicable to intermediary service providers pursuant to section 117-16 (R.L.H. 1955). The legislative history behind the statute makes clear that the legislature did not intend to include transportation services as qualifying for the wholesale rate.
01/30/1964	64-6	General Excise Tax	GENERAL EXCISE TAX; EXEMPTION; KAISER HEALTH PLAN Kaiser Foundation Health Plan, Inc. is exempt from the payment of general excise taxes on its receipts derived from operation of its health plan because the organization is operated exclusively for the benefit of the community and for the promotion of social welfare and from which no profit inures to the benefit of any private stockholder or individual.
08/22/1962	62-47	General Excise Tax	GENERAL EXCISE TAX; COOPERATIVE APARTMENT CORPORATION; MAINTENANCE FEES The operation and management of apartment buildings for the purpose of meeting taxes, rents, and maintenance expenses “is with the object of gain or economic benefit either direct or indirect,” and the monthly payments collected for that purpose constitute taxable gross income.
01/10/1962	62-1	General Excise Tax	GENERAL EXCISE TAX; INTEREST PAYMENTS ON ACCOUNT OF AGREEMENT OF SALE Interest payments received by taxpayer under an agreement of sale contract constitute gross income subject to general excise tax. The interest is not exempt as consideration received in a casual sale since the taxpayer deals primarily in real estate and such a sale, even if the sale is the only one made by the business venture, would not be unexpected or unusual. The interest is not exempt under the exception for sales of land in fee simple since that exception only applies to exempt amounts paid as purchase price for the land. Furthermore, the interest income is not derived from the sale of the land but instead from a contractual agreement which calls for the sale of land at some future date.
08/22/1961	61-85	General Excise Tax	GENERAL EXCISE TAX; TREATMENT OF “NON-CONSTRUCTION” COSTS OF CONTRACTORS
01/13/1961	61-8	General Excise Tax	GENERAL EXCISE TAX; TAXATION OF MUTUAL FUND DEALERS Hawaii registered mutual fund dealers with agreements with mainland security dealers to sell securities handled by the mainland dealers in the State of Hawaii for a stated commission are subject to general excise taxation on their commission income. The mutual fund dealers are independent contractors and not employees of the mainland dealers since the mainland dealers do not exercise control over them.
02/18/1960	60-8	General Excise Tax	GENERAL EXCISE TAX; WHETHER LOAN COMPANY IS PERMITTED TO PASS TAX ON TO CUSTOMERS
09/11/1959	59-122	General Excise Tax	GENERAL EXCISE TAX; EXEMPTION FROM FOR HOSPITAL AUXILIARY OPERATING SUNDRY STORES IN HOSPITAL The general excise tax does not apply to organizations operating exclusively for charitable purposes. Whether an activity carried on by a charitable organization is a charitable one depends upon the dominant purpose of the activity concerned. If its primary purpose is to obtain revenue or profit, it is not charitable even though the revenue or profit derived therefrom is used for the charitable purposes of the organization. But the realization of revenue or profit from an activity does not make the activity any less charitable if such realization is incidental and secondary. Since the purpose of the auxiliary in taking over the sundry stores being that of relieving the hospital of the burden of providing this essential service to its patients, the revenue is exempt from general excise tax.
02/09/1959	59-15	General Excise Tax	GENERAL EXCISE TAX; INTERSTATE COMMERCE; FOREIGN COMMERCE; MERCHANDISE SHIPPED FROM TERRITORY TO AN OUT-OF-THE-TERRITORY DESTINATION If buyer of goods takes possession of goods within the Territory and arranges for transportation of goods out of Territory, the sale is subject to general excise taxation. If buyer inspects and accepts goods in Territory and instructs seller to ship goods out of the Territory as buyer’s agent and at buyer’s expense and risk of loss, the sale is subject to general excise taxation. If buyer inspects goods in Territory but agreement is for seller to ship goods outside of Territory at the seller’s risk and expense, the general excise tax does not apply as the sale is not completed in the Territory. If buyer orders goods by mail or telephone for delivery outside of the Territory, the general excise tax does not apply since the sale is not completed within the Territory. If goods are shipped or mailed to a foreign country, the general excise tax does not apply as the sale is immune from taxation under the export clause of the United States constitution.
11/19/1958	58-189	General Excise Tax	GENERAL EXCISE TAX; “GROSS INCOME” OF TELEVISION OR RADIO STATION FOR AIR TIME CHARGE; DEDUCTION ALLOWABLE FOR AGENCY DISCOUNTS; PARTY ENTITLED TO “TRADE DISCOUNT” The gross income of certain radio and television stations should be computed net of the allowance for so-called agency discounts given to advertising agencies for the reason that the discount is not in the nature of a commission paid by the stations to the agency.
08/27/1958	58-150	General Excise Tax	GENERAL EXCISE TAX; WHAT CONSTITUTES JOINT VENTURE; PARTIES LIABLE FOR TAX OF A JOINT VENTURE A joint venture is a taxable entity for general excise tax purposes. Thus, the joint venture is liable for general excise tax on receipts of the joint venture. To be a joint venture for general excise tax purposes requires two or more persons who combine resources to undertake jointly a single business transaction for joint, and not several, profit. Although not necessary, the persons constituting a joint venture generally agree to share losses and have rights of mutual control and management.
04/17/1958	58-77	General Excise Tax	GENERAL EXCISE TAX; APPLICABILITY OF TAX TO INSURANCE AGENT The earnings of an agent of an insurance company are subject to general excise tax unless the agent is characterized as an employee of the insurance company. SAME; EMPLOYEE VERSUS INDEPENDENT CONTRACTOR The relationship of the agent and the insurance company is that of an independent contractor since the agent is not subject to direction by the insurance company as to how he shall accomplish the sale of insurance policies. The fact that the agent’s compensation contract with the insurance company states that the agent is an employee of the company is not decisive. The controlling factor in the employee-employer relationship is whether the person retaining the services of another has the right or power to exercise control over the latter of the details and method of performing the desired result. If the employer only retains control as to result, the latter is an independent contractor.
01/21/1958	58-17	General Excise Tax	GENERAL EXCISE TAX; TAXABILITY OF INTEREST RECEIVED UNDER AGREEMENTS OF SALE OF LAND Interest received under an agreement of sale of land is not taxable unless the taxpayer is engaged in financing, lending money, or is active in the investment field, in which event such interest would be either interest derived from the investment of capital of the business or income from the business of the taxpayer.
11/22/1957	57-150	General Excise Tax	GENERAL EXCISE TAX; TAX RATES APPLICABLE TO VARIOUS PINEAPPLE PRODUCTS General excise tax is imposed on manufacturers involved in “canning”. The process used by the taxpayer in its production of frozen pineapple chunks and frozen pineapple concentrate falls clearly within the definition of canning, and is therefore subject to the manufacturing tax rate.
11/05/1957	57-137	General Excise Tax	GENERAL EXCISE TAX; APPLICABILITY OF TAX TO BUILDING CONTRACTORS General contractor entered into a contract to sell land and to build a home for a set sum. The portion of the sales price relating to the sale of the land is exempt from general excise tax. However, the portion of the price relating to the home is subject to the general excise tax rate applicable for engaging in the business of contracting.
11/05/1957	57-138	General Excise Tax	GENERAL EXCISE TAX; USE OF COMPLETED CONTRACT METHOD The completed contract method of construction accounting is not permitted for general excise tax purposes. Under the general excise tax law, only the cash basis and accrual basis is authorized. A contractor who used the completed contract basis does not employ the accrual basis for the purposes of the general excise tax since he does not report the income accruing within the taxable year, but instead reports the gross income accruing from contracts completed during the taxable year.
09/03/1957	57-92	General Excise Tax	GENERAL EXCISE TAX; WHETHER LOAN COMPANIES ARE PERMITTED TO PASS TAX ON INTEREST TO CUSTOMERS General excise tax imposed on interest received by loan companies from borrowers may not be passed on to borrowers unless the loan companies lawfully could increase the interest rate itself.
08/27/1957	57-90	General Excise Tax	GENERAL EXCISE TAX; WHETHER SALES TO STATE GOVERNMENT, EXEMPT ORGANIZATION, ETC. ARE EXEMPT FROM TAX Sales to the territorial and country governments, their agencies and instrumentalities, and to exempt organizations are all subject to tax upon the seller pursuant to section 117-14(b)(1).
08/21/1957	57-88	General Excise Tax	GENERAL EXCISE TAX; RATE OF TAX; ON AGRICULTURAL COOPERATIVES AND ON BUSINESS CORPORATION OF WHICH AGRICULTURAL COOPERATIVES ARE SHAREHOLDERS Corporation formed by several agricultural cooperatives to serve as a retail outlet for the agricultural products of cooperatives and to serve as a source of supply for materials and supplies for the cooperatives. Each member of the cooperative is taxable at 1% upon the gross proceeds of the sales of its produce to the corporation. The corporation is taxable at 31/2% upon the materials and supplies which go to the members of the cooperatives.
06/17/1957	57-49	General Excise Tax	GENERAL EXCISE TAX; APPLICABILITY OF EXEMPTION TO FEDERAL AIRCRAFT CONTRACTS Whether revenues relating to contracts with the United States (to furnish equipment and services for aircraft maintenance) are exempt from general excise taxation depends upon whether performance of the contract has occurred outside the Territory.
05/22/1957	57-42	General Excise Tax	GENERAL EXCISE TAX; WHAT CONSTITUTES “BUSINESS”; ROYALTIES FROM BOOK A professor who, as a sideline, writes books and receives royalties therefrom is engaged in business and is taxable upon the gross income received therefrom. Activities need not be regular or continuous for the general excise tax to apply.
05/22/1957	57-43	General Excise Tax	GENERAL EXCISE TAX; APPLICABILITY TO COMMISSIONS OF SOLICITOR RECEIVED AFTER RETIREMENT One who engages in a service business or other activity is liable for general excise tax upon the gross income therefrom whenever it is received or accrued, even though he is retired and no longer licensed for that business.
05/10/1957	57-39	General Excise Tax	GENERAL EXCISE TAX; CONSTITUTIONALITY OF ASSESSMENT PROVISION ON TAXPAYER WHO FAILED TO FILE RETURN Section 5469 of general excise tax law which states that assessments of tax “shall be final” where persons fail to, neglect, or refuse to make a return, does not violate due process.
01/08/1957	57-4	General Excise Tax	GENERAL EXCISE TAX; WHAT CONSTITUTES “REAL PROPERTY”; CROP DAMAGES Amounts paid by Territory to land owner for crop damages are not treated as payments for the condemned land, but as separate payments for the crop subject to general excise taxation.
01/08/1957	57-5	General Excise Tax	GENERAL EXCISE TAX; APPLICABILITY OF EXEMPTION TO GOODS SOLD TO U.S. GOVERNMENT The exemption for sales to the United States government does not apply to the activity of canning tuna. The exemption only applies to the activity of selling.
10/29/1956	56-110	General Excise Tax	GENERAL EXCISE TAX; TREATMENT OF COOPERATIVE OWNERSHIP HOUSING CORPORATION DURING CONSTRUCTION OF PROJECT The corporation is treated as a person engaged in the business of contracting, and the builder with whom the corporation contracts is to be treated as the subcontractor.
04/10/1956	56-48	General Excise Tax	GENERAL EXCISE TAX; INTERSTATE COMMERCE; TAXATION OF FOREIGN CORPORATIONS ACTING AS CARRIERS OF HOUSEHOLD GOODS All packing, unpacking, storage and special services for which a separate charge is made, and all pickup, delivery, and hauling services for which a separate charge is made, is subject to general excise tax. However, pickup, delivery, storage and hauling incidental to an interstate movement and not the subject of a separate charge are not taxable.
01/25/1956	56-13	General Excise Tax	GENERAL EXCISE TAX; TAX RATE APPLICABLE; MANUFACTURING, WHAT CONSTITUTES; LUMBER YARD Kiln drying of lumber belonging to another is not part of a manufacturing process and is therefore a service subject to tax at the two and one-half percent rate, irrespective of whether it is done for another lumber yard, a contractor, or a furniture manufacturer. Lumber milled which belongs to another lumber yard or a contractor is also not a manufacturing process and is taxed at the service rate of two and one-half percent. However, lumber milled which belongs to a furniture manufacturer is part of the value of a manufactured product, and the milling work is taxed at the rate of one percent pursuant to Section 5455, paragraph d.
01/13/1956	56-6	General Excise Tax	GENERAL EXCISE TAX; ENGAGING IN BUSINESS; SALES OF NEW AUTOMOBILES BY FINANCE COMPANY Finance Factors engaged in the automobile sales business for general excise tax purposes when it took out an automobile dealer’s license, rented a location to sell repossessed vehicles, hired experienced auto salesmen, and advertised the vehicles for sale. Thus, vehicles sold at location were subject to general excise taxation. However, repossessed vehicles sold by the company to other auto dealers and a governmental agency were incidental to company’s finance business and not subject to general excise taxation since they were sold before the company engaged in the business of selling automobiles.
11/07/1955	55-105	General Excise Tax	GENERAL EXCISE TAX; TAXABILITY, FOREIGN INVESTORS; LOANS SECURED BY HAWAII REAL PROPERTY Mainland investors which enter into a transaction relating to loans secured by mortgages upon real property in Hawaii could be subject to general excise tax, depending upon the facts of the specific transaction.
10/20/1955	55-93	General Excise Tax	GENERAL EXCISE TAX; TAXATION OF PRINCIPAL CONTRACTOR AND INTERMEDIARY; LAUNDRY BUSINESS Gross receipts received by concessionaire for laundry services provided to patrons pursuant to a concession agreement with a military base is subject to the two and one-half percent tax rate. Commercial laundry business which performed actual laundry work under a subcontract arrangement with concessionaire is subject to the intermediary tax rate of one percent.
06/15/1951	1859	General Excise Tax	GENERAL EXCISE TAX; UNITED STATES, FEDERAL INSTRUMENTALITIES; SHIPYARD RESTAURANT SYSTEM The Shipyard Restaurant System, consisting of federal civil service employees operating a food service under the supervision of the Shipyard commander, pursuant to Naval Civilian Personnel Instructions 66, is, as stated in said regulations, a non-profit cooperative subject to territorial taxes; such organization is not protected by any implied governmental immunity. SAME; SAME; SAME The Shipyard Restaurant System, an organization of federal civil service employees having the use of federal property and acting under federal supervision in the operation of a food service, but without federal ownership of the food stocks or funds and without federal liability for obligations incurred, is not an integral part of the Navy Department or a wholly owned instrumentality. SAME; SAME; SAME By reason of the Act of December 6, 1945, the Navy is without power to create a separate and distinct entity that is a federal instrumentality, and Civilian Personnel Instructions 66 relating to Food Service has not purported to authorize the creation of such an entity. SAME; EXEMPTION, GENERALLY A group of federal civil service employees associated together for the operation of a cooperative food service for their own welfare are not entitled to tax exemption on the benefits thus received any more than they are entitled to tax exemption on their salaries.
06/15/1951	1859	General Excise Tax	GENERAL EXCISE TAX; SAME The Shipyard Restaurant System is not an organization operated for the benefit of the community; no exemption contained in the gross income tax law applies to this organization. TAXATION; SAME No exemption contained in the net income tax law applied to the Shipyard Restaurant System prior to Act 166 of the Session Laws of 1951. Commencing with tax year 1952, on 1951 income, it is exempt as a “local association of employees” meeting the requirements for exemption set forth in the amended law.
05/17/1946	1856	General Excise Tax	GENERAL EXCISE TAX; EXEMPTION; FOREIGN CORPORATIONS A foreign corporation “doing business” in the Territory is not exempt from the requirement that it qualify and pay the fee therefor, on the ground that it is engaged solely in inter state or foreign commerce, or in the performance of federal construction contracts.
08/28/1942	1824	General Excise Tax	GENERAL EXCISE TAX; INTERSTATE COMMERCE; DUE PROCESS OF LAW; SALE TO UNITED STATES Upon consideration of facts submitted as to a sale made by a local merchant to the United States, it is the opinion of the Attorney General that the sale was a transaction localized within the State of California under Department of Treasury v. Wood Preserving Corp., 313 U.S. 62, and the proceeds thereof are not subject to the Territory’s tax.
07/29/1942	1822	General Excise Tax	GENERAL EXCISE TAX; INTERSTATE COMMERCE; DUE PROCESS OF LAW; PRIOR AG OPINIONS ON SUMMARIZED. Conclusions reached in Opinion No. 1717 of July 18, 1939 as supplemented and partly superseded by opinion letters of September 30, 1940 (No. 1289), July 28, 1942 (No. 932), and October 22, 1941 (No. 753), re interstate commerce and re consumption tax on contractors and on buyers of automobiles for mainland delivery, summarized.
07/29/1942	1823	General Excise Tax	GENERAL EXCISE TAX; SECURITIES BROKER’S COMMISSIONS; APPORTIONMENT THEREOF In the case of a commission to a local broker for buying or selling securities on a mainland exchange the amount subject to tax is the amount derived from the business done in the Territory, after exclusion of the amount earned by the mainland broker for his services on mainland exchange.
02/03/1942	1798	General Excise Tax	GENERAL EXCISE TAX; TAX RATE FOR SERVICES; TAXI BUSINESS The furnishing of transportation by a taxi company is not taxable at the wholesale rate of 1/4 of 1%, irrespective of whether or not the transportation is furnished directly to the customer, since there is no wholesale rate for services. SAME; SAME Sale of transportation tickets is not a sale of tangible personal property.
01/29/1942	1795	General Excise Tax	GENERAL EXCISE TAX; APPLICATION OF RETAIL TAX RATE A manufacturer whose customer is buying for his own use is taxable at the retail rate. SAME; PRINTERS; TAX RATE The applicability under the local statute of cases in certain states classifying job printers as engaged in service business is not considered in the absence of a request for opinion as to such classification, together with statement of facts.
11/21/1941	1792	General Excise Tax	GENERAL EXCISE TAX; SALES TO UNITED STATES Sales to the United States must be included in the measure of the gross income tax.
01/16/1941	1762	General Excise Tax	GENERAL EXCISE TAX; FEDERAL CONTRACTORS The proceeds from equipment purchased by the Untied States as a part of and incidental to the naval air base contract NOy-3550, under the authority of Section 4(a) of Public No. 43, 76th Congress, 1st Session, e. 87, should be taxed the same as other proceeds of the construction contract. SAME; UNITED STATES In view of recent cases in the Supreme Court of the United States and the position taken by the Attorney General of the United States, the gross income tax imposed by Act 141 (Ser.A-44) L. 1935 might be applied to the proceeds from the equipment furnished to the United States even if the transaction were viewed as an ordinary purchase of commodities.
11/12/1940	1751	General Excise Tax	GROSS INCOME TAX; PUBLIC UTILITIES, EXEMPTION FROM The exemption from gross income tax on the basis that the taxpayer is a public utility does not apply during any part of the year unless the taxpayer is subject to public utilities tax for the tax year in question.
09/18/1940	1740	General Excise Tax	GENERAL EXCISE TAX; UNITED STATES; CONSTRUCTION COST PLUS CONTRACTS After examination of the United States naval air base contract of August 5, 1939, NOy-3550, and the law applicable thereto, it is the opinion of the Attorney General that the Contractors are true independent contractors, and are not acting as agents of the United States in purchasing materials for the contract projects. SAME; FEDERAL CONTRACTORS In view of the fact that the Contractors under the United States naval air base contract of August 5, 1939, NOy-3550 are not agents of the United States, supply houses furnishing them materials are liable to gross income tax at the wholesale rate of 0.25%, and the Contractors are liable to tax at the contractors’ rate of 11/2% upon the amount received from the United States for the projects, including materials and labor and the Contractor’s fixed-fee.
12/8/1939	1728	General Excise Tax	GENERAL EXCISE TAX; FEES RECEIVED BY A SHERIFF OR DEPUTY Fees received and retained by a sheriff or his deputy are exempt under Section 4, subsection (2)(s) of Act 141, Laws 1935 as “salaries or wages.”
10/02/1939	1723	General Excise Tax	TAXATION: MUTUAL BENEFIT SOCIETIES: An association subject to the provisions of Sections 6852 A to L inclusive, R. L. 1935, as amended, which receives fees and dues from members and engages to pay benefits in the form of payments of hospital in the form of payments of hospital bills and similar bills, in its nature is an insurance organization. SAME: SAME: Such a mutual benefit society is not a “fraternal beneficiary society” when it has no objects or activities other than provision of benefits in the event of sickness. TAXATION: NET INCOME TAX: A Mutual benefit society subject to the provisions of Sections 6852 A to L inclusive, R.L. 1935, as amended, which is not also a fraternal beneficiary society, is subject to the net income tax imposed by Ch.65, R.L. 1935. SALE: GROSS INCOME TAX: Such a mutual benefit society, which is not also a fraternal benefit society, is liable to the gross income tax imposed by Act 141 (Ser. A-44) L. 1935. SAME: SAME: A corporation or association which is operated for the economic benefit of its shareholders or members is engaged in “business” within the meaning of that term as defined in Section 1(7) of Act 141 (Ser. A-44) L. 1935. WORDS AND PHRASES: “Business” as defined in Section 1 (7) of Act 141 (Ser. A-44) L. 1935 includes the activities of a corporation or association operated for the economic benefit of its shareholders or members.
08/22/1939	1720	General Excise Tax	TAXATION: INTERSTATE COMMERCE: The application of the tax imposed by Act 141, L. 1935 as amended, to revenues derived from stevedoring, rigging gear, checking freight and similar services depends upon whether such services are conducted by the taxpayer or whether on the other hand the revenue is derived from the mere supplying of facilities and labor. SAME: SAME: The revenue derived from service which is preliminary or subsequent to the interstate transportation but not apart thereof, is not immune from taxation under the interstate commerce clause. SAME: SAME: The interstate commerce clause does not prohibit the imposition of a privilege tax measured by gross receipts where a similar levy by other states may not be imposed and consequently a multiplication of tax levies cannot result.
07/18/1939	1717	General Excise Tax	TAXATION: ACT 141, S. L. 1935: The tax imposed by Act 141, S. L. placed does not accrue where an order is placed through an agent who represents the buyer, and the seller, who supplies the goods from mainland stock, is not doing business in the Territory. SAME: INTERSTATE COMMERCE: No unconstitutional burden on interstate commerce is imposed by a tax measured by the sale of goods, where the contract of sale is made in the Territory? the price is paid here, and the goods are delivered here. SAME: DUE PROCESS OF LAW: The legislature can and has taxed local business measured by gross proceeds of sales transacted in the Territory even though title does not actually pass in the Territory. SAME: INTERSTATE COMMERCE: When a sale is made of goods in transit even though title should pass through the transfer of the bill of lading while the goods were still in transit there would be no unconstitutional burden on interstate commerce, there being no risk of a cumulative burden of taxation to which local commerce is not exposed. SAME: SAME: If a mainland firm, acting through a local representative, sells goods to a local buyer which the seller and buyer arrange to have supplied to the buyer through interstate commerce, cannot be taxed by the Territory because of the risk of a cumulative burden to which local commerce is not exposed. SAME: SAME: If a local firm sells goods to a local buyer, although the seller and buyer arrange to have the goods supplied to the buyer through interstate commerce, the seller is not exposed to the risk of cumulative taxation on the sale to the local buyer where he merely purchases the necessary goods on the mainland and has them shipped direct to the buyer, and local taxation of the sale is not an unconstitutional burden on interstate commerce.
05/03/1939	1704	General Excise Tax	GENERAL EXCISE TAX; CONTRACTS WITH UNITED STATES, TAXABILITY OF PROCEEDS FROM The gross income tax applies to gross receipts of private contractors from contracts with the United States for the construction of public works.
05/02/1939	1703	General Excise Tax	GENERAL EXCISE TAX; NON-PROFIT CORPORATIONS, TAXABILITY OF The East Maui Irrigation Co. Ltd., incorporated as a joint stock company under Chapter 221, R.L. 1935, is subject to the gross income tax although its receipts never exceed its operating expenses.
01/10/1939	1684	General Excise Tax	GENERAL EXCISE TAX; SUGAR ACT BENEFITS, NATURE OF. Payments received under the Sugar Act of 1937 are derived from the business or privilege of growing sugarcane. SAME; NATURE OF TAX A grower of sugarcane who also is engaged in milling or processing pays the tax measured by the value of the sugar milled for the privilege of engaging in milling or processing; the tax so measured is not imposed upon the business or privilege of growing sugarcane. SAME; SAME A grower of sugarcane who also is engaged in selling sugarcane in its natural state pays the tax measured by the gross proceeds of sale for the privilege of engaging in selling such products; the tax so measured is not imposed upon the business or privilege of growing sugarcane. SAME; RATE OF TAX The payments under the Sugar Act of 1937 having been derived from the exercise of a privilege not taxable under other subsections of section 2 of Act 141, L. 1935, i.e., from the exercise of the privilege of growing sugarcane, such payments must be returned for taxation at the 1-1/4 percent rate, as provided by section 2-I H of said Act 141. SAME; SUGAR ACT PAYMENTS, APPLICABLE TO Provisions of Act 141, L.1935 disclose the intention of the Legislature that payments such as payments under the Sugar Act of 1937 should be taxed under that Act. SAME; SAME The payments under the Sugar Act of 1937 are part of the gross income of the taxpayers to whom such payments are made. CONSTITUTIONAL LAW; TAXATION OF SUGAR ACT BENEFITS The source of the payments under the Sugar Act of 1937 is within the Territory to the extent required for the due process of law; and taxation thereof does not impose an unconstitutional burden on interstate commerce. TAXATION, GROSS INCOME; DEDUCTIONS ALLOWABLE Though the taxpayer pays additional wages in order to comply with the conditions imposed by section 301 of the Sugar Act of 1937, such additional wages cannot be deducted from the payments received for purposes of the tax imposed by Act 141, L. 1935.
03/23/1938	1665	General Excise Tax	GENERAL EXCISE TAX; INSURANCE COMPANIES; NATURE OF TAX Section 6850, R.L. 1935, imposing a tax of 21/2 percent on gross premiums received from all business done within the Territory by insurance companies, provides for a tax on the privilege of doing business during the year in which the premiums were received and not during the year in which the tax is collected. SAME; SAME; LIABILITY FOR TAX Section 6850, R.L. 1935 imposes a tax on the business of insurance companies, and it was not the intention of the legislature to exempt such companies from a tax on its first year operation although the tax is levied and collected the following year.
12/28/1935	1629	General Excise Tax	GENERAL EXCISE TAX; EXEMPTIONS The General Excise Tax Law (Gross Income Tax), Act 141, L. 1935 exempts from taxation only those federal instrumentalities which are exempt by the Constitution of the United States. SAME; SUBJECTS TAXABLE Post exchanges are subject to the provisions of the General Excise Tax Law. SAME; SAME Sales to post exchanges by a local merchant must be included in the measure of the tax of a local merchant who is subject to the General Excise Tax Law. SAME; SAME Where goods are sold and delivered to an individual and the purchase price is billed to the post exchange, which collects from the individual, such method of collecting the purchase price does not make the transaction a sale to the post exchange.
07/05/1935	1620	General Excise Tax	GENERAL EXCISE TAX; RENTALS AS GROSS INCOME Agents derived from leasing of property must be included in the return of “gross income”. SAME; LEASING OF PROPERTY AS “BUSINESS” Leasing of property and receiving rents therefrom constitutes “business” within the meaning of the Gross Income Tax Act.
07/01/1935	1619	General Excise Tax	GENERAL EXCISE TAX; “DOING BUSINESS”, WHAT CONSTITUTES Where a person who is engaged in no other trade, business, profession or occupation deposits money in a savings account in a bank and receives interest thereon, such person is not “doing business” within the terms of the Gross Income Tax Act. SAME; SAME Where a person, who is engaged in some trade, business, profession or occupation, the gross receipts of which are taxable under the Gross Income Tax Act, deposits money in a savings account of a bank and receives interest thereon, such person is subject to the Gross Income Tax and should apply for a license.
06/06/1934	1603	General Excise Tax	EXCISE TAX; INSURANCE COMPANIES; NATURE OF TAX The tax provided in section 3473, R.L. 1925, as amended by Act 46, 2nd Sp. S.L. 1932, is an excise tax imposed on insurance companies for the privilege of doing business in Hawaii. SAME; SAME; SAME The tax imposed under section 3473, R.L. 1925, as amended, is based upon the principle that the business which is done depends upon the Territory’s consent. INSURANCE; “DOING BUSINESS,” WHAT CONSTITUTES Independent of other acts the continuance of a foreign insurance company’s obligation under insurance contracts written prior to its discontinuance of business in the Territory does not constitute doing business in the Territory when the company has no officers, agents, or office in the Territory and the premiums are remitted direct to a foreign office. SAME; SAME In connection with such insurance a company may do business within the Territory where it maintains an office, has agents or collects premiums within the Territory. SAME; SAME Adjustments of losses within the Territory by a foreign insurance company may constitute “doing business”. SAME; SAME SAME; SAME If an insurance company solicits business, has offices or agents, collects premiums or writes insurance in the Territory it is doing business in Hawaii. SAME; SAME Where residents of the Territory apply for insurance by mail to a foreign office of a foreign insurance company and the insurance is written at such office and the premiums are remitted direct to such office the company is not, by reason of such insurance, doing business in Hawaii.
10/19/1932	1592	General Excise Tax	EXCISE TAX; COLLECTION OF BY WITHHOLDING PERCENTAGE OF PAYMENTS ON ACCOUNT OF FEDERAL AID HIGHWAY CONSTRUCTION CONTRACTS; FEDERAL AID HIGHWAY CONSTRUCTION CONTRACTS, WHETHER FEDERAL OR TERRITORIAL IN NATURE Contracts executed by the Territory with private contractors for the construction of highways to be paid for partly out of Federal aid funds under the Federal Highway Act, as amended and supplemented, are purely Territorial and not Federal contracts, and the Federal moneys paid over from time to time, pursuant to said Act as amended and supplemented, to the Territorial Treasurer as agent for the Territory to receive the same, become, upon such payment, Territorial funds; the Treasurer may therefore legally withhold 1% of such moneys on account of the Territorial business excise tax pursuant to Section 6(b) of Act 42, 2nd Special Session Laws of 1932, when making payments therefrom to private contractors on Federal Aid project.

Income Tax

Opinions of the Attorney General – Income Tax, by Date
Date	Number	Category	Description
10/19/2011	11-2	Income Tax	INCOME TAX; TAX FILING STATUS OF PARTNERS OF CIVIL UNIONS Under the State’s Civil Union Act, civil union partners have the same tax filing status options as married couples for Hawaii income tax purposes.
07/01/1991	91-3	Income Tax	INCOME TAX; EMPLOYER-PROVIDED VEHICLES The personal use value of state vehicles would not be included in the gross income of Department of Public Safety’s Narcotics Enforcement Division investigators if the investigators first obtained written permission for personal use (but not for pleasure) of state vehicles from the governor, upon the written recommendation of the comptroller.
03/04/1965	65-5	Income Tax	TAXATION; RESIDENCY Taxpayer who left Hawaii in 1958 to work in Okinawa, first as a member of the armed forces and later as an employee of the United States government, remained a resident for Hawaii income tax purposes and all income earned by the taxpayer is subject to Hawaii income tax.
01/23/1964	64-5	Income Tax	TAXATION; REFUND OF PROPERTY TAXES TO TRUST; BENEFICIARIES Refunds of real property taxes to a trust after termination of the trust is income to the owners of the property – the beneficiaries. SAME; PARTNERSHIP; USE OF TAX CREDITS AGAINST PARTNERSHIP TAXES Partner with tax credits can apply credits to real property and gross income taxes attributable to partnership since each partner is jointly and severally liable for the these taxes owed by the partnership. Partner’s credit can not be applied against income taxes, however, since income taxes are not the tax liability of the partnership.
07/07/1958	58-122	Income Tax	TAXATION; PARTNERSHIPS; 1957 TAX LAW; Discussion on properly accounting for different accounting periods of partnership and partners.
07/07/1958	58-123	Income Tax	TAXATION; PARTNERSHIPS; 1957 TAX LAW Discussion on properly accounting for different accounting periods of trust and beneficiaries.
07/01/1958	58-120	Income Tax	TAXATION; NONRESIDENT BENEFICIARY OF RESIDENT TRUST; BENEFICIARY OF NONRESIDENT TRUST Taxability of nonresident beneficiaries of trusts created under Hawaii law and administered by Hawaii resident trustee who hold powers of control and management over trust corpus discussed. The opinion sets forth in table format how nonresident beneficiaries are taxed with respect to various types of trust income, including dividends, interest, and rents. Generally, nonresident beneficiaries are taxable on all resident trust income except for income from tangible assets located outside the Territory. For purposes of comparison, the opinion sets forth in table format the tax consequences to resident and nonresident beneficiaries of various types of income received from a nonresident trust.
06/12/1958	58-104	Income Tax	TAXATION; PROCEDURE FOR CLAIMING REFUND FOR ESTIMATED TAX PAID UNDER PROTEST Procedures outlined for making a claim for refund for taxes paid under protest.
04/07/1958	58-70	Income Tax	TAXATION; EXEMPTION OF CORPORATION FORMED FOR NON-CHARITABLE PURPOSES BUT ACQUIRED AND OWNED BY TAX-EXEMPT HOSPITAL In determining the tax exempt status of corporation, emphasis should be placed upon the dedication of the corporation’s funds to charity rather than upon the exact manner by which this has been accomplished. Thus, when a charitable institution is the sole stockholder of a for-profit corporation and the officers and directors of the charitable institution and the corporation are practically identical, the fact that the corporation is a profit corporation is not fatal to the tax exemption.
11/01/1957	57-136	Income Tax	TAXATION; INTERSTATE SALE OF GOODS; IMPACT OF EMPLOYEES IN HAWAII The imposition of the income tax on the interstate sale of goods is a question under the due process clause. The due process clause requires that a fair allocation of income be made. The maintenance of an office is not essential to the application of the net income tax. The maintenance in the Territory of resident employees who regularly and continuously solicit business in itself is sufficient for the imposition of a fairly measured tax.
09/05/1957	57-96	Income Tax	TAXATION; SITUS OF INTANGIBLE PERSONAL PROPERTY OF RETIREE MOVING TO HAWAII AFTER ATTAINING 65 The doctrine of mobilia sequuntur personam applies to determine whether income from intangible property is treated as taxable income from property owned in the Territory. Under the doctrine the intangible property is deemed to have a situs at the place of the domicile of the owner, unless under the particular circumstances it has acquired a situs elsewhere. Where the domicile of a retiree who recently moved to Hawaii is depends upon all of the facts and circumstances. SAME; TAXABILITY OF BONUSES RECEIVED BY RETIREE FOR SERVICES PERFORMED ON MAINLAND PRIOR TO RETIREMENT Bonuses received by retiree who took up residence in the Territory for services performed on the mainland are not taxable by the Territory.
07/08/1957	57-60	Income Tax	TAXATION; CORPORATE REORGANIZATION Tax consequences to corporation which transfers its assets and liabilities to another corporation in exchange for stock of the acquiring corporation.
10/09/1956	56-104	Income Tax	TAXATION; TAXABILITY, AWARD FOR SUGAR CANE CROP LOST IN LAND CONDEMNATION The award relating to the sugar cane crop loss is gain from the disposition of property held primarily for sale or other disposition.
09/18/1956	56-99	Income Tax	TAXATION; TAXABILITY, WAGES EARNED ON GUAM BY RESIDENTS OF HAWAII The taxability of the wages earned by a resident of Hawaii for services provided in Guam turns upon whether the wages have been subjected to the Guamanian income tax. Taxability of wages earned by personal services performed outside the Territory, not in the course of local employment, depends upon whether the wages have been “subjected to income tax in any other jurisdiction (other than for Federal tax)”.
05/21/1956	56-67	Income Tax	TAXATION; TAXABILITY, DISTRIBUTIONS Taxation of liquidating distributions depends upon whether the distributions are out of earnings and profits.
01/18/1956	56-8	Income Tax	TAXATION; APPLICATION OF 3 FACTOR FORMULA; CATALOG AND DIRECT MAIL ORDER SALES Sears Roebuck & Co. is not permitted to exclude from the numerator of the sales ratio calculation the sales attributable to retail catalog sales and direct mail order sales. Taxpayer only included in the numerator the sales from its retail stores in the Territory and excluded retail catalog sales and direct mail order sales to persons in the Territory on the ground that the activity creating the income occurs outside of the Territory. SAME; SAME; SAME The apportionment formula statute does not permit a unitary business to break its sales into segments as was done by Sears Roebuck. The language in the apportionment statute is intended to adopt the widest possible concept of what constitutes doing business in the Territory. Thus, once a taxpayer is found to be doing business in the Territory, the taxpayer must follow the formula and include in the numerator of the sales ratio all sales required to be included under the terms of the statute. The only question is whether application of the statutory formula causes more income to be attributed to the Territory than is just and equitable. SAME; SAME The Tax Collector for the Territory may lawfully determine that application of the statutory formula requiring Sear Roebuck to include catalog and direct mail sales to Hawaii customers in the numerator of the sales ratio is just and equitable.
06/15/1951	1859	Income Tax	TAXATION; SHIPYARD RESTAURANT SYSTEM; COMPENSATION AND DIVIDENDS The territorial gross income tax and net income tax apply to the association known as the Shipyard Restaurant System, and withholding of the 2% Compensation and Dividends Tax from the compensation of Shipyard Restaurant employees is required. When the personal property tax was in effect it applied to property held by such association and not owned by the United States.
06/15/1951	1859	Income Tax	TAXATION; COMPENSATION AND DIVIDENDS TAX The Shipyard Restaurant System is not a federal instrumentality, but even if it were an entity having that status it would not thereby be relieved of the duty of withholding the 2% tax from the compensation of employees.
12/05/1942	1830	Income Tax	TAXATION; TAXATION OF ROOM AND BOARD PROVIDED BY EMPLOYER TO EMPLOYEES Room, board, laundry and similar perquisites are part of the compensation subject to tax unless furnished solely for the convenience of the employer. SAME; SAME If perquisites are furnished under a contract, or if cash payments are made in lieu of perquisites, such facts in themselves demonstrate that the perquisites are not being furnished solely for the convenience of the employer. There are other cases where the perquisites constitute inducement to the employment or are furnished to the employee as a matter of right. In all such cases the perquisites are part of the compensation and taxable as such.
09/15/1942	1826	Income Tax	TAXATION; CHARACTER OF INTEREST FROM CONDEMNATION AWARD Interest allowed as part of a condemnation award as compensation for the period during which the taxpayer has neither the land nor the value thereof in money represents compensation for loss of use and is ordinary income, not capital gain.
04/09/1942	1812	Income Tax	TAXATION; DEDUCTIONS; RETIREMENT PLAN PAYMENTS Deductions for payments made by an employer to an insurance company under a group annuity contract retirement plan are not limited to five per cent of net income.
04/06/1942	1811	Income Tax	TAXATION; BAD DEBT DEDUCTIONS; WORTHLESS BOND In a case of surrender of a bond partially worthless upon receipt of a new bond in a lesser amount, or upon the receipt of partial payment, a bad debt deduction may be enjoyed where there is compliance with the statutory conditions applicable to bad debt deductions.
01/31/1942	1797	Income Tax	TAXATION; ACCUMULATED TRUST INCOME Trust income which is to be either distributed to the grantor or accumulated, is not taxable to the grantor insofar as it is accumulated, merely because of the possibility of distribution of the accumulations to the grantor in the discretion of the trustees in the event of an emergency.
11/05/1941	1789	Income Tax	TAXATION; REFUNDS OF TAXES ILLEGALLY COLLECTED In the event of a refund of federal taxes illegally collected, which have been deducted as taxes paid on the return for an earlier year, where the amount of tax due for the earlier year still can be adjusted, ordinarily such adjustment should be made and the refund does not constitute income in the year of its receipt. SAME, SAME; ESTOPPEL A taxpayer who does not include in his gross income a refund of taxes illegally collected may be assessed therefor only if he is estopped from showing that the taxes refunded were illegally collected.
03/20/1940	1730	Income Tax	TAXATION; EXEMPTIONS FOR NATIONAL GUARDSMEN Compensation received from the United States by officers and enlisted personnel for services in the National Guard is not exempt from income tax under Act 241, Laws 1939.
03/06/1940	1729	Income Tax	TAXATION; FEDERAL JUDGES Article III, Section 1 of the United States Constitution does not apply to legislative courts and consequently both of the judges of the United States District Court for Hawaii are liable for Unemployment Relief and Welfare taxes and net income taxes without regard to the time of taking office. SAME; SAME Certain judges of the Supreme Court and Circuit Courts, holding terms which commenced in 1939 and after July 1, 1939, are liable for Unemployment Relief and Welfare taxes and net income taxes upon compensation for services rendered during their new terms of office, since Section 80 of the Organic Act does not prohibit the application of such taxes when imposed before the assumption of a new term of office, and the Public Salary Tax Act of 1939 and Act 241, L. 1939 did impose such taxes before the new terms of office commenced. SAME; SAME It is concluded for the present that the Unemployment Relief tax and net income tax should not be applied to the salaries of judges of the Supreme Court or Circuit Court whose terms commenced before 1939, nor to the salaries of the judges who commenced new terms in 1939 insofar as received for services rendered during the prior terms of office; the Attorney General expressly reserves reconsideration of this question, particularly as to the net income tax, upon further clarification of the status of Evans v. Gore, 253 U.S. 245. SAME; CONSTITUTIONALITY OF NET INCOME TAX AND GROSS INCOME TAX From a constitutional viewpoint a tax on net income is more apt to be valid than a tax on the gross proceeds, though recent cases tend to uphold taxes on the gross proceeds as well. SAME; ORGANIC ACT The history of Section 80 of the Organic Act is reviewed. SAME; SAME; STATUTES; IMPLIED REPEAL The Public Salary Tax Act did not repeal the prohibition contained in Section 80 of the Organic Act as to the diminution of judges’ salaries.
03/13/1939	1698	Income Tax	TAXATION; UNEMPLOYMENT RELIEF; APPLICABILITY Act 209, L. 1933, providing for the deduction and withholding of a tax on dividends paid, incorporated by reference the definition of dividends in the income tax law, and a subsequent amendment of such definition does not relieve insurance companies from deducting such tax on dividends paid to its shareholders. STATUTES; CONSTRUCTION AND OPERATION Where the Revised Laws of 1935 refer to “dividends as defined in Chapter 65”, while the original enactment of the Unemployment Relief tax law referred to “the territorial income tax law (Act 44, Second Special Session Laws 1932)”, the original enactment controls. SAME; SAME The rule is that where one act adopts another by referring to it as a particular statute such adoption takes the statute as it exists at the time of adoption.
01/25/1939	1688	Income Tax	TAXATION; INSURANCE COMPANIES; DUAL CAPACITY Where an insurance company carries on, in addition to its insurance business, an agency business as well, it operates under a dual capacity for the purposes of taxation. GROSS INCOME TAX; INSURANCE COMPANIES An insurance company which also operates as an agent of other insurance companies is taxable on its gross income from its agency business, notwithstanding Act 141, sec. 4 L. 1935. TAXATION; INSURANCE COMPANIES An insurance company which also operates as an agent of other insurance companies is taxable on its net income from its agency business, notwithstanding Chapter 65, sec. 2031, R.L. 1935.
10/26/1937	1659	Income Tax	TAXATION; NET PROCEEDS FROM PRIVATE OPERATIONS CONDUCTED IN ARMY RESERVATION, TAXABILITY OF A contractor deriving income out of operations on work performed at Hickam Field, an army reservation, is subject to income taxes.
01/06/1936	1630	Income Tax	TAXATION; INSURANCE; STATUTES; CONSTRUCTION AND OPERATION Principles of stare decisis held applicable to insurance commissioner’s ruling and followed for eighteen years, and construing words “gross premiums received” in section 6850, R.L. 1935 to exclude “dividends” credited, especially where legislature during such period had amended the law once and re-enacted it without change upon two occasions; statute being doubtful and the insurance commissioner’s construction not being palpably wrong. SAME; SAME; “DIVIDEND” “Dividend” in insurance terminology does not represent a bare share of corporate profit apportioned to a stockholder, but is a share of surplus allocated to a policy-holder which represents a return of a portion of the premium not needed to meet losses and expenses, and may include a distribution of earnings. SAME; INSURANCE; LIABILITY OF PERSONS AND PROPERTY Section 6850, R.L. 1935 construed as requiring a deduction from the gross amount of premiums received of the premiums or part thereof which have been returned. SAME; STATUTES; CONSTRUCTION AND OPERATION A construction of a statute adopted by the legislature or executive departments of the Territory and for over eighteen years accepted by the various agencies of the Government and the people, where the meaning of the statute is doubtful and the legislature or administrative construction is not patently erroneous or palpably wrong, will usually be accepted as correct by the Courts.
03/10/1930	1554	Income Tax	TAXATION; INCOME FROM PROPERTY IN TRUST; BENEFICIARY Income receivable by life beneficiaries from property devised and/or bequeathed in testamentary trust upon which the inheritance tax has been assessed, is subject to the Territorial income tax. SAME; EXEMPTION FOR INCOME FROM BEQUESTS OR INHERITANCES Income receivable by life beneficiaries from property devised and/or bequeathed in testamentary trust is not a bequest or inheritance within the contemplation of Section 1391, Revised Laws of Hawaii, 1925, exempting bequests or inheritances from taxation under the Territorial Income Tax Law.
11/23/1928	1513	Income Tax	TAXATION; FOREIGN CORPORATIONS – LIABILITY FOR TERRITORIAL INCOME TAX Section 1389, Chapter 103, Revised Laws of Hawaii, 1925, contemplates the assessment of the income tax upon net income derived by foreign corporations from business carried on in the Territory of Hawaii when distinguishable and ascertainable as such.
10/15/1928	1510	Income Tax	TAXATION; INCOME FOR PERSONAL SERVICES PERFORMED ON MAINLAND Section 1388, Revised Laws of Hawaii, 1925, contemplates taxation of income derived by accountant for services performed on mainland when such services are incidental to business conducted in Hawaii.
10/08/1928	1507	Income Tax	TAXATION; WHAT CONSTITUTES INCOME; FOREIGN COMMISSIONS Income in the nature of commissions derived from mainland branches maintained by Hawaiian corporations, and wholly incidental to the business conducted in Hawaii, is subject to taxation in Hawaii.
10/08/1928	1508	Income Tax	TAXATION; LOSSES; TIMING OF DEDUCTION Deductible losses under Section 1391, R.L.H. 1925 are confined to actual losses sustained in taxation period. Determination of loss is dependent upon facts reflecting actual loss.
10/05/1928	1506	Income Tax	TAXATION; EXEMPTION FOR INHERITED PROPERTY Property upon which Inheritance Tax is paid under Chapter 104, R.L.H. 1915, is not thereby exempted from Income Tax upon income derived therefrom in subsequent taxation periods.
10/01/1928	1505	Income Tax	TAXATION; COMPUTATION OF DEPRECIATION ALLOWANCE Section 1391, Revised Laws of Hawaii, 1925, limits such allowance to amounts actually shown by and written off books of taxpayer.
09/20/1928	1502	Income Tax	TAXATION; DEDUCTIONS Under R.L. 1925, Section 1391, a taxpayer, in his income tax returns, is entitled to deduct from his gross taxable income the necessary expenses incurred in managing investments, the income of which, though returnable, is not subject to assessment of the income tax thereon.
09/12/1928	1500	Income Tax	TAXATION; INSURANCE COMPANIES; ASSESSMENT OF AND UPON DIVIDENDS PAID BY INSURANCE COMPANIES Dividends paid to their stockholders by insurance companies (which companies, under Section 3473, Revised Laws of Hawaii, 1925, are taxed on a percentage of their premiums) are not exempt from assessment of income taxes thereon under the last paragraph of Section 1391, R.L. 1925, and should be included in assessing the income of the persons receiving such dividends, such companies not being corporations upon the “net profits” of which a tax has been assessed “as required by this chapter” (Chap. 103, R.L. 1925), within the meaning of the last paragraph of Section 1391, R.L. 1925.
08/21/1928	1492	Income Tax	TAXATION; INCOME; COMPENSATION OF UNITED STATES REFEREE IN BANKRUPTCY Compensation of U.S. Referee is exempt from Territorial income taxes.
12/15/1927	1459	Income Tax	TAXATION; DEDUCTION FOR FOREIGN LOSSES AGAINST HAWAII INCOME Under Section 1391, R.L. 1925, losses in business ventures in California, by a resident of that State, such ventures being in no way related to the source of such resident’s income earned in Hawaii, derived from property located in Hawaii, are not deductible as losses incurred in trade or business.
06/30/1927	1441	Income Tax	TAXATION; SITUS OF INTANGIBLES The fact that a local resident has executed and delivered a full power of attorney to one in New York, giving such attorney full control of her intangible personal property, does not deprive the Territory of the right to tax such intangible personal property and the income from the same. SAME; SAME The creation of revocable trusts for the handling of such stocks and bonds upon the mainland of the United States does not deprive the Territory of the right to tax such stocks and bonds and the income therefrom.
06/18/1927	1438	Income Tax	TAXATION; FEDERAL CONTRACTS The profits on contracts of private individuals or corporations with the United States Government are taxable by the Territory.
05/06/1927	1430	Income Tax	TAXATION; EMPLOYEES’ RETIREMENT SYSTEM; CONTRIBUTIONS; TAX EXEMPTION The contributions or premiums paid by employees to the Retirement System are not deductible in their income tax returns, but the amounts received by them from the System, whether by return of contributions or by receipt of benefits under the Act, are exempt.
02/08/1927	1416	Income Tax	TAXATION; DEDUCTIBILITY OF DIVIDENDS RECEIVED FROM FOREIGN CORPORATIONS WHICH ARE ASSESSED AN INCOME TAX UPON THEIR PROFITS EARNED WITHIN THE TERRITORY There is no distinction, as far as the deductibility of dividends is concerned, between foreign and domestic corporations; dividends received from either may be deducted by stockholders if such corporations have been assessed upon their net profits earned from business carried on or property owned in the Territory.
01/19/1927	1412	Income Tax	TAXATION; INCOME FROM MAINLAND MUNICIPAL BONDS The Territory may constitutionally impose an income tax upon such mainland municipal and city bonds only as were issued for purposes partaking of the nature of public utilities.
03/30/1926	1336	Income Tax	TAXATION; SUBSISTENCE AND QUARTERS FURNISHED, WHETHER TAXABLE To constitute taxable income, subsistence and quarters furnished employees must be clearly intended as a part of the compensation of such employees, and not an incident of the employment furnished as a matter of the employer’s convenience; and the quarters of plantation laborers, the subsistence and quarters of hospital nurses and quarters furnished rural school teachers held not to be income within the meaning of the income tax statue.
03/17/1926	1332	Income Tax	TAXATION; STATUTE; RETROSPECTIVE Act 192 of the Session Laws of 1925 does not have the effect of transferring to the County or City and County Treasurer the duty of collecting taxes delinquent under Sections 1307 and 1311 prior to January, 1926.
02/19/1926	1325	Income Tax	TAXATION; INCOME TAX EXEMPTION NOT ALLOWED ON CERTAIN INTEREST PAYMENTS FROM THE FEDERAL GOVERNMENT When the Federal Government repays, with interest, overpayments of Federal taxes, neither the principal of the refund nor the interest thereon is exempt from Territorial taxation.
02/18/1926	1323	Income Tax	TAXATION; DEDUCTION FOR LOSSES Under Section 1391, R.L. 1925, deductions allowable for losses are limited to those incurred in business, trade or enterprises entered into for profit, and are not allowable for personal or private losses unconnected with business or trade or enterprises for profit.
10/28/1925	1273	Income Tax	TAXATION; CORPORATION; INSURANCE PREMIUM Payments to a corporation under policies upon the lives of their officers are corporate income and taxable as such. TAXATION; CORPORATION; INSURANCE PREMIUM Premiums paid by corporations upon policies of insurance on the lives of their officers are deductible from gross income as being a necessary expense of carrying on the business of the corporation.
10/09/1925	1265	Income Tax	TAXATION; ASSESSMENT OF OMITTED INCOME Where deductions in income taxes have been improperly allowed in prior years, the Tax Assessor upon discovery of the impropriety of such deductions may go back and re-assess the omitted income.
10/09/1925	1266	Income Tax	TAXATION; TAX ON BUSINESS OF CORPORATIONS ENGAGED IN INTERSTATE COMMERCE The income or earnings from the business of a corporation engaged exclusively in transporting freight and passengers between Hawaiian, Mainland and Foreign ports is not subject to taxation under Section 1389, R.L. 1925. TAXATION; TAX ON INTRA-TERRITORIAL BUSINESS But when such corporation is engaged in both interstate and intra-Territorial business the income or earnings derived from intra-Territorial business is subject to taxation under said section.
10/06/1925	1259	Income Tax	TAXATION; WHETHER IMPOSED ON AN ESTATE AS AN ENTITY FOR WHICH THE ADMINISTRATOR IS LIABLE The tax imposed by our income tax statutes is on persons and corporations and does not extend to estates, the income of which is not taxable against the administrator.
10/06/1925	1260	Income Tax	TAXATION; BOARD AND LODGING AS A “GAIN” TAXABLE UNDER THE STATUTE The value of articles and/or accommodation received in kind, in addition to cash received as compensation for personal services rendered, constitutes taxable income.
09/03/1925	1247	Income Tax	TAXATION; SALE OF REALTY Profits realized, within a taxation period, from a sale of real estate made within two years of the purchase thereof, are subject to the Territorial Income Tax.
05/29/1925	1224	Income Tax	TAXATION; SALE OF REALTY The profits on real property sold many years after its acquisition are not subject to the Territorial income tax.
01/27/1925	1200	Income Tax	TAXATION; TIME OF PURCHASE OF REAL ESTATE Where property was purchased pursuant to an agreement of sale, the date of the purchase is not that of the agreement. TAXATION; SALE OF REAL ESTATE The Supreme Court case of Frear v. Wilder, Assessor, 25 Hawaii 603, being unreversed, adherence to it means that, in considering the taxability of “the gains, profits and income” of a person engaged in the business of buying and selling real estate, it is immaterial to consider the time of purchase of property which was sold at a profit within the taxation period.
01/04/1922	996	Income Tax	TAXATION; TRANSFERS TO CORPORATION IN EXCHANGE FOR STOCK The owner of property who transfers it to a new corporation organized by him in exchange for stock in such new corporation is not liable to the payment of an income tax on such transfer even though the transaction should show a book profit to such owner.
11/30/1920	951	Income Tax	TAXATION; FOREIGN CORPORATION DIVIDENDS AND INTEREST Dividends on foreign corporation stock and interest on foreign corporation bonds received by persons or corporations resident or domiciled in Hawaii should be returned as taxable income. SAME; SAME Income received by individuals resident in Hawaii from orchards, farms or other business actually conducted in a foreign jurisdiction is not taxable income. SAME; SAME Income received by an Hawaiian corporation from a business actually conducted in a foreign jurisdiction is not taxable income.
04/19/1920	923	Income Tax	TAXATION; GIFTS Under the provisions of Chapter 94, R.L.H. 1915, and Section 1, Act 206 S.L. 1919, money or property acquired by gift forms a part of the income for purposes of the special income tax. SAME; EXEMPTION Under the provisions of Section 1, Act 206 S.L. 1919 a fixed exemption of $6,000.00 is allowed to each individual taxpayer and cannot be considered as a family exemption.
04/02/1919	822	Income Tax	TAXATION; SPECIAL INCOME TAX Under the provisions of Act 117 of the Session Laws of 1915, as amended, money and the value of personal property acquired by inheritance is exempt from the payment of the additional income tax prescribed by that Act.
02/19/1919	803	Income Tax	INCOME TAX; DEDUCTIONS Donations or subscriptions to the Red Cross or War Relief Fund are not allowable deductions under Act 157 of the Session Laws of 1917.
01/15/1919	786	Income Tax	TAXATION; INTEREST ON UNITED STATES BONDS The income derived as interest on United States Bonds is not taxable by the Territory of Hawaii.
03/09/1917	642	Income Tax	INCOME TAX; DEDUCTIONS FROM INCOME Salaries or wages of employees performing purely personal services not connected with the business or profession of the taxpayer are not deductible.
10/11/1916	558	Income Tax	TAXATION; INCOME TAXATION OF BUILDING & LOAN SOCIETY Income earned by Mutual Building & Loan Society of Hawaii, Ltd. and distributed among members who are stockholders is subject to income tax.
04/21/1915	414	Income Tax	TAXATION; INSURANCE COMMISSIONS Agents of insurance companies must pay income tax on commissions received by them from insurance companies.

Inheritance Tax

Opinions of the Attorney General – Inheritance Tax, by Date
Date	Number	Category	Description
01/13/1961	61-9	Inheritance Tax	INHERITANCE TAX; VALUATION; BLOCKAGE THEORY FOR VALUING STOCK Because the Hawaii legislature provided that the market quotation method is to be used to value stocks traded on the open market for purposes of inheritance tax, no blockage discount is permitted for determining the value of such stocks.
07/25/1960	60-87	Inheritance Tax	INHERITANCE TAX; WHETHER DEVISEES ARE “GRANDCHILDREN” The adopted child of the decedent’s daughter is the decedent’s grandchild under section 122-5 of the inheritance tax statute (R.L.H. 1955). The great grandchild of the decedent however does not qualify as a “grandchild” within the meaning of the statute.
01/16/1958	58-11	Inheritance Tax	INHERITANCE TAX; TAXABILITY OF SAVINGS ACCOUNT HELD IN NAME OF DECEDENT AS TRUSTEE FOR DECEDENT’S SON; WHETHER ACCOUNT CONSTITUTES “IRREVOCABLE TRUST” Making a deposit in a bank of the depositor’s money in his own name as trustee for another does not, without more, create an irrevocable trust. Because the trust is revocable, the transfer of the funds in such an account to the beneficiary took effect after the death of the depositor and is therefore subject to inheritance tax. If, however, the funds constituted an obligation by decedent owed to his son, the amount on deposit may be deductible from decedent’s estate.
04/23/1957	57-36	Inheritance Tax	INHERITANCE TAX; LIFETIME TRANSFER Inheritance tax does not apply to conveyance of real property made during lifetime of decedent for a valuable and adequate consideration.
04/09/1956	56-47	Inheritance Tax	INHERITANCE TAX; TAXABILITY OF INTERVIVOS TRANSFERS TO TRUST WHERE SETTLOR DOES NOT RETAIN BENEFICIAL OWNERSHIP OF TRUST OR POWER OR REVOCATION Settlor transferring personal property pursuant to a trust deed executed in 1938 (the terms of which provided that the income was payable to a charitable trust during the life of the settlor, and upon her death all income was payable to certain nephews and nieces of the settlor, for their lives, and twenty years after the death of the last surviving nephew or niece the trust was to terminate and all trust principal and income to be distributed to the persons entitled to the income of the trust immediately prior to its termination), under which the settlor reserved no power to revoke, amend, or alter the trust deed, was taxable upon her death in 1954 on such transfer as a “transfer intended to take effect in possession and enjoyment at or after death” under Section 5552, Revised Laws of Hawaii of 1945. INHERITANCE TAX; RELATIONSHIP WITH FEDERAL ESTATE TAX The inheritance tax is levied on the privilege of receiving property upon the death of the donor, whereas the Federal estate tax is levied on the privilege of transferring one’s property at death. This inherent distinction between the two types of taxes makes those Federal cases holding that the estate tax does not apply to transfers whereby the donor presently divests himself irrevocably of the title and control over the property not controlling on the question of whether the inheritance tax would apply.
01/19/1956	56-117	Inheritance Tax	INHERITANCE TAX; DEDUCTIBILITY OF LITIGATION EXPENSES Attorney fees incurred by the successful caveators against the will of Ida M. Keniston are allowed as a deduction from the gross estate for inheritance tax purposes.
09/24/1946	1858	Inheritance Tax	INHERITANCE TAX; LIFE ESTATE, RETENTION OF The creation of an inter vivos trust, reserving to the settlor the enjoyment of the income for his life, is a transfer “intended to take effect in possession or enjoyment” after the death of the grantor, and accordingly is subject to inheritance tax. INHERITANCE TAX; STATUTES; CONSTRUCTION AND OPERATION The interpretation generally put by state courts on succession tax laws similar to the Hawaii law, and which had been announced prior to the adoption of the Hawaii law, has the weight usually given to such decisions, irrespective of a contrary view of the federal courts concerning a different type of tax law. TERRITORIAL COURTS; STARE DECISIS; EFFECT OF FEDERAL COURT DECISIONS In matters of local concern territorial courts are not bound to follow federal judicial precedents which are inappropriate to the local situation.
12/09/1942	1831	Inheritance Tax	INHERITANCE TAX; EXEMPTION; PROPERTY PREVIOUSLY SUBJECT TO TAX Section 2063-B, R.L. 1935, providing that property shall not be subject to inheritance tax when it previously has been subject to inheritance tax within a five year period, applies although no tax was due upon the previous transfer because of the relationship of the decedent (then the transferee) to the previous decedent. SAME; SAME; SAME The expression “when property has been subject to a tax” as used in the inheritance tax law, Section 2063-B, R.L. 1935, implies that the property has been within the scope of the taxing provisions but does not necessarily imply that a tax has been levied against the particular transferee.
02/24/1939	1692	Inheritance Tax	INHERITANCE TAX; WILLS, APPLICABILITY TO PROPERTY DISPOSED OF BY According to the weight of authority, inheritance tax should be imposed in accordance with the will and not in accordance with the directions as to distribution of the property agreed upon between the parties. SAME; RENUNCIATION OF WILL, EFFECT OF When property is received by an heir pursuant to a bona fide renunciation by the beneficiary named in the will, the inheritance tax is to be computed upon the transfer to the heir. SAME; SAME In computing the inheritance tax, where part of the property passes under the will and part by intestacy pursuant to renunciation by the named beneficiary, the debts and administration expenses must be applied against the property passing by intestacy. SAME; EXEMPTION OF PROPERTY PREVIOUSLY TAXED Act 152 (A-53) L. 1937 exempts property taxed within the previous five years although such former tax accrued before the enactment of this amendment. SAME; SAME Act 152 (A-53) L. 1937 should not be construed as creating a general deduction from the gross estate but on the contrary is an exemption of the particular property formerly taxed.
12/28/1938	1680	Inheritance Tax	INHERITANCE TAX; DEDUCTIONS ALLOWABLE Trustee’s commissions provided for in trust instrument may not be deducted in computing inheritance tax, such commissions being payment for services rendered for the beneficiaries of the trust and not comprising expenses of administration of the estate of deceased settlor.
04/21/1930	1557	Inheritance Tax	INHERITANCE TAX; DESCENT AND DISTRIBUTION; DOWER Where a widow takes a distributive share of her deceased husband’s estate in the absence of issue of the deceased, her dower is merged and extinguished in her greater right by descent, and inheritance tax should be computed on the value of the whole estate so taken without any deduction on account of any supposed dower.
04/02/1927	1421	Inheritance Tax	INHERITANCE TAX; SUBJECT OF GERMANY A German subject who inherited property in the United States after war was declared is only liable to pay such tax as a citizen of the United States would have paid for the same inheritance. SAME; TREATIES; EFFECT OF WAR Paragraph III of Article X of the Treaty with Germany of 1871, was not abrogated by the Declaration of War with Germany. Declaration of War, or a State of War does not abrogate all clauses of a treaty between the belligerent nations.
01/07/1927	1406	Inheritance Tax	INHERITANCE TAX Property passing by deed intended to take effect in possession or enjoyment after death is subject to the inheritance tax laws of the Territory of Hawaii.
07/12/1926	1365	Inheritance Tax	INHERITANCE TAX; TYPES OF TRANSFERS APPLICABLE TO Section 1400 R.L. 1925 (inheritance tax law) applies when property (1) passes by will or by the intestate laws of the Territory; (2) by gift, deed, grant or sale made in contemplation of death; (3) by gift, deed or sale intended to take effect in possession or enjoyment after death. SAME; PROPERTY CONVEYED IN TRUST BY DECEDENT Property conveyed by trust deed under which the donor received the income during his lifetime, and upon his death passed to his wife in fee simple, is subject to taxation under the inheritance tax laws of the Territory.
06/26/1926	1362	Inheritance Tax	INHERITANCE TAX; SHARES OF STOCK AS PROPERTY WITHIN TERRITORY Under the inheritance tax statute shares of stock in domestic corporations, owned by a non-resident decedent are “property within the Territory” and are taxable under the provisions of said statute.
06/23/1926	1359	Inheritance Tax	INHERITANCE TAX; ALIEN PROPERTY CUSTODIAN Property formerly held by an alien decedent, but which was vested in the Alien Property Custodian at the time of the death of said decedent, is not subject to the inheritance tax law.
09/12/1925	1253	Inheritance Tax	INHERITANCE TAX; RESIDENT ALIENS; RATE OF TAX Resident aliens are entitled to have their succession rights taxed at the same rate as are those of resident citizens.
02/05/1925	1202	Inheritance Tax	INHERITANCE TAX; MONEY IN BANKS Much of the money on hand in local banks on January 1 of each year have escaped taxation for the years 1910 to 1922, inclusive, due to a misunderstanding of the statutes, it is now not only permissible for, but obligatory upon, each assessor to make the necessary additions to his “assessment or tax list” for each of those thirteen years, pursuant to the mandatory provisions of 1267 of the Revised Laws.
04/13/1922	1015	Inheritance Tax	INHERITANCE TAX; FAMILY ALLOWANCE AS A DEDUCTION The family allowance provided for by Act 38 of the Session Laws of 1917 is a deductible item as an expense of administration and is therefore not taxable under the Inheritance Tax statute.
11/23/1921	992	Inheritance Tax	INHERITANCE TAX; EXEMPTION TO CHARITABLE OR EDUCATIONAL INSTITUTIONS Opinion No. 623 reconsidered and the authorities discussed.
03/07/1921	964	Inheritance Tax	INHERITANCE TAX; TREATY WITH GREAT BRITAIN The provisions of the treaty with Great Britain ratified July 28, 1900, have not been extended to the Territory of Hawaii. Opinion No. 874 discussed and overruled.
02/01/1921	960	Inheritance Tax	INHERITANCE TAX; LIFE ESTATE Under the facts stated it is held that no inheritance tax is due upon the shares of the estate passing to the children of Mary Ann Lemon on her death.
01/20/1921	959	Inheritance Tax	INHERITANCE TAX; LIFE ESTATE Under the facts shown it is held that the transfer under the Emma Dreier Trust Agreement is not a taxable transfer as the decedent merely held a life estate in stock for which an inheritance tax had already been paid.
09/10/1920	940	Inheritance Tax	INHERITANCE TAX; FOREIGN REAL ESTATE Under the provisions of Section 1323 R.L.H. 1915 as amended by Act 223 S.L. 1917, the Territory is not entitled to receive inheritance tax on real estate situate outside of the jurisdiction of the Territory.
07/08/1920	932	Inheritance Tax	INHERITANCE TAX; RETROACTIVE OPERATION; PROPERTY DISTRIBUTION AFTER PASSAGE OF ACT Chapter 96 of the Revised Laws of Hawaii of 1915, as amended, providing for the imposition of an inheritance tax, is not retroactive in operation, and property which passed by will prior to the taking effect of the Act, but which is not distributed because of an intervening life estate until after such date, is not subject to the tax.
04/12/1920	922	Inheritance Tax	INHERITANCE TAX; NON-RESIDENT DECEDENT Stocks of foreign corporations (whose property and business is within the Territory) owned by non-resident decedent not taxable. SAME; SAME Bonds and other evidences of indebtedness of foreign corporations actually kept within this Territory and owned by a non-resident decedent are property within this Territory and taxable as such.
08/02/1919	874	Inheritance Tax	INHERITANCE TAX; CITIZEN OF GREAT BRITAIN Pursuant to the provisions of a treaty between the United States and Great Britain, ratified July 28, 1900, the Territory of Hawaii may not impose an inheritance tax on the transfer of property by will or descent, to a citizen of Great Britain, larger in rate or otherwise, than that imposed on citizens of the United States. (Opinion overruled by Opinion No. 964.)
04/24/1919	829	Inheritance Tax	INHERITANCE TAX; ALIEN The share of an estate passing to a woman born in Hawaii prior to annexation of non-American parentage and who, prior to annexation, was married to a German subject, and whose husband died in 1918, is taxable as property passing to an alien within the meaning of Act 223, Session Laws of 1917. SAME; SAME Under the facts as presented the woman never having acquired any status as an American citizen, cannot resume the status of an American citizen upon the death of her husband. (Opinion overruled by Opinion No. 831.)
03/05/1919	806	Inheritance Tax	INHERITANCE TAX; EXEMPTION FROM The legatees and devisees under the will of a non-resident decedent by which certain property situate within the Territory of Hawaii passes to such legatees and devisees, are entitled to the full exemption provided for by Section 1323 of the Revised Laws of Hawaii, 1915, as amended, and such exemption as to the property passing in this Territory, may not be reduced by pro-rating the same in the proportion that the value of the estate in this Territory bears to the value of the whole estate.
03/04/1919	804	Inheritance Tax	INHERITANCE TAX; DEVISEE’S LIABILITY Upon the transfer of property in contemplation of death, the inheritance tax is to be paid by the devisee and not by the annuitant.
11/09/1918	759	Inheritance Tax	INHERITANCE TAX; BONDS OF HAWAII CORPORATION Bond securities of Hawaiian corporations held abroad by a non-resident decedent are property within this Territory and are subject to the provisions of the Inheritance Tax Law.
11/01/1918	754	Inheritance Tax	INHERITANCE TAX; ANNUITY Under the facts as stated, the value of the annuity should be computed and taxed at the 3% rate. SAME; FUND FOR CARE OF BURIAL PLOT A sum of money which, by the will is to be set aside for the purpose of producing revenue to pay the expense incident to the care of burial plots may be subject to an inheritance tax under our statue. SAME; FOREIGN REAL PROPERTY Real estate situated in a foreign jurisdiction is not taxable upon a transfer under our statute.
10/30/1918	753	Inheritance Tax	INHERITANCE TAX Under Section 1333, R.L.H. 1915, the Treasurer of the Territory of Hawaii is not obligated to attend at a transfer of stock, nor to make the examination in said section referred to, and a failure on his part to do either or both in no way prejudices the right of the Territory, nor does it release the parties referred to in said section from their legal obligation to retain sufficient property to pay said tax. SAME The Treasurer of the Territory, when convinced that all the facts necessary for the determination of the amount of the inheritance tax in the case of non-resident decedents have been placed before him, may collect and receipt for the same without resorting to court proceedings, and may certify that all such taxes have been paid or that no taxes are due, according as the facts may warrant.
01/15/1917	622	Inheritance Tax	INHERITANCE TAX; STOCK IN FOREIGN CORPORATION Stock in foreign corporations held by a resident of the Territory of Hawaii at the time of his death is subject to the inheritance tax of the Territory.
01/15/1917	623	Inheritance Tax	INHERITANCE TAX; PROPERTY TRANSFERRED TO CHARITY Charitable institutions located outside of the Territory are not exempt from the Territorial inheritance tax.
11/21/1916	613	Inheritance Tax	INHERITANCE TAX; EXEMPTIONS Exemption for property passing to a child of a testator are from the separate legacies and not from the aggregate value of the estate.
04/25/1916	513	Inheritance Tax	INHERITANCE TAX; ANTENUPTIAL AGREEMENTS Antenuptial agreements are probably not within the purview of the provision of our statute imposing taxes on transfers made in contemplation of death or to take effect thereafter.
11/13/1915	466	Inheritance Tax	INHERITANCE TAX Will of Charles Furneaux. Taxation of remainder interest owned by tax exempt college.

Liquor Tax

Opinions of the Attorney General – Liquor Tax, by Date
Date	Number	Category	Description
11/21/1941	1792	Liquor Tax	LIQUOR TAX; SAME

Military Reservation

Opinions of the Attorney General – Military Reservation, by Date
Date	Number	Category	Description
10/30/1937	1660	Military Reservation	TAXATION; MILITARY RESERVATIONS, JURISDICTION OVER If Congress should assume exclusive “legislative jurisdiction” over military or naval reservations in the Territory the United States thereby would assume exclusive jurisdiction for all purposes. SAME; SAME; JURISDICTION TO TAX IN Assumption by the United States of exclusive jurisdiction over a military or naval reservation eliminates the taxing jurisdiction of the state or territory in which such reservation is situated. SAME; SAME; JURISDICTION OVER Upon the assumption by the United States of exclusive jurisdiction over a military or naval reservation the laws previously applicable in such territory, including statutory laws, continue in effect until superseded by action of Congress, but statutes and amendments subsequently passed in the state or territory in which such reservation is situated have no effect unless adopted by Congress.
12/28/1935	1629	Military Reservation	TAXATION; MILITARY RESERVATIONS, JURISDICTION OVER The Territory of Hawaii has jurisdiction to tax activities carried on within a military reservation located in the Territory provided that the exercise of this taxing power does not interfere with the exercise of federal functions carried out through federal instrumentalities. SAME; SAME The rule as to the jurisdiction of a territory over military reservations differs from the rule of the jurisdiction of a state over military reservations located within its borders. POST EXCHANGES; NATURE AND STATUS A post exchange is a voluntary unincorporated, cooperative association of army organizations in which all share as partners in the profits and losses. TAXATION; POST EXCHANGES A post exchange, though organized and managed in accordance with Army Regulations, is not such a part of the Army as to come within that class of federal instrumentalities exempt from taxation by the Territory of Hawaii.

Motor Vehicle Weight Tax

Opinions of the Attorney General – Motor Vehicle Weight Tax, by Date
Date	Number	Category	Description
11/11/1940	1749	Motor Vehicle Weight Tax	MOTOR VEHICLE WEIGHT TAX; EXEMPTION FOR AUTOS OF PROBATION OFFICERS; FIRE CHIEF; DEPUTY FIRE MARSHAL Section 2157, R.L. 1935 as amended by Act 214, L. 1937, does not entitle probation officers of the Circuit and Juvenile Courts, or the chief of a county fire department, who is also a deputy fire marshal, to exemption from motor vehicle weight tax. MOTOR VEHICLE WEIGHT TAX; AUTOS OF SPECIAL POLICE OFFICERS Section 2157, R.L. 1935, as amended by Act 214, L. 1937, entitles special police officers who are making a substantial use of their motor vehicles in their special police duties to exemption from motor vehicle weight tax.
05/04/1926	1344	Motor Vehicle Weight Tax	MOTOR VEHICLE WEIGHT TAX All motor vehicles are subject to an annual tax of one cent per pound in weight, excepting publicly owned motor vehicles which are exempt and motor vehicles brought into the Territory by non-residents who have paid taxes thereon in the state of their residence and new motor vehicles carried in stock for the purpose of sale, both classes of which are exempt for a period of three months. SAME; SAME Motor vehicles taxed under Sec. 1306 R.L. 1925, cannot be again taxed under Sec. 1315 R.L. 1925.
06/25/1917	671	Motor Vehicle Weight Tax	TAXATION; STATUTES; RETROACTIVE Act 135, S.L. 1917, is not retroactive and applies only to automobiles purchased after the approval of said Act.

Mutual Insurance Tax

Opinions of the Attorney General – Mutual Insurance Tax, by Date
Date	Number	Category	Description
02/27/1962	62-10	Mutual Insurance Tax	MUTUAL INSURANCE; TAX BASE OF FACTORY MUTUAL INSURANCE The tax base of factory mutual insurance companies includes gross deposits, but the unabsorbed portion thereof is not treated as a return premium within the meaning of the tax statute.

National Banks

Opinions of the Attorney General – National Banks, by Date
Date	Number	Category	Description
03/16/1927	1419	National Banks	TAXATION; NATIONAL BANKS; EFFECT OF ACT OF CONGRESS OF MARCH 25, 1926 The provisions of the Act of Congress of March 25, 1926, — amending Section 5219, U.S.R.S – relating to the taxation of National Banks, applies to Territories as well as to States. SAME; SAME; SAME The general provisions of the tax laws of the Territory of Hawaii became operative, as against National Banking Institutes, upon the enactment by Congress of the Act of March 25, 1926, and no new local legislation is required to subject the property of such banks to taxation.

Natural Disaster Tax Relief

Opinions of the Attorney General – Natural Disaster Tax, by Date
Date	Number	Category	Description
01/23/1964	64-5	Natural Disaster Tax Relief	TAXATION; RELIEF FOR NATURAL DISASTER LOSSES; TRUSTS AND BENEFICIARIES Beneficiaries of a trust which filed claims for disaster relief are not entitled to remission, refund, or forgiveness of taxes which are owed by them. The tax relief granted under the disaster relief statute is only available to original claimants and transferees within a circumscribed degree of relationship to the original claimants; the beneficiaries of the trust are neither.

Net Income Tax

Opinions of the Attorney General – Net Income Tax, by Date
Date	Number	Category	Description
10/30/1939	1726	Net Income Tax	TAXATION: NET INCOME TAX. A foreign corporation not doing business in the Territory is not liable to tax upon the interest from certificates of deposit issued by local banks merely because it has local officers to make deposits and withdrawals who determine how much money should be left in commercial accounts and how much placed at interest through the issuance of certificates of deposit. SAME: SAME: Under the facts stated it does not appear that such certificates of deposit have a business situs in the Territory. SAME: SAME: Mere local domicile of a debtor does not render the creditor liable to net income tax upon the interest paid by the debtor. SAME: SAME: The mere fact that a debtor is a domestic corporation does not render the creditor liable to net income tax upon the interest paid by such debtor. WORDS AND PHRASES. The expression “receiving or deriving income from sources within the Territory” in Section 2031, R.L. 1935 refers to sources of income within the Territory according to the constitutional taxing jurisdiction of the Territory.

Personal Property Tax

Opinions of the Attorney General – Personal Property Tax, by Date
Date	Number	Category	Description
01/21/1920	914	Personal Property Tax	PERSONAL PROPERTY TAX; EXEMPTION OF AUTOMOBILES FROM TAXATION WHEN IN ACTUAL USE OF CERTAIN INSTITUTIONS Section 1246, Revised Laws of Hawaii of 1915, as amended by Act 222, Session Laws of 1917, allows exemption from taxation of an automobile in the actual use of the eleemosynary institutions named in said section, regardless of the definition of personal property contained in Section 1240, Revised Laws of Hawaii, 1915, as amended by said Act 222.

Poll Tax

Opinions of the Attorney General – Poll Tax, by Date
Date	Number	Category	Description
11/03/1941	1787	Poll Tax	POLL TAX; REFUNDS FOR EXEMPT PERSONS Poll taxes collected prior to the enactment of Act 10, L. 1941 from persons exempted by that Act cannot be ordered to be refunded by the Legislature at its Special Session of 1941.
09/15/1925	1254	Poll Tax	POLL TAX; RETIRED U.S. ARMY PERSONNEL; EXEMPTION FROM A retired enlisted man of the United States Army, who is an inhabitant of the Territory, is not exempt from the payment of Poll Tax.
08/24/1924	1163	Poll Tax	POLL TAX; FEMALE WITH INDEPENDENT INCOME The expression “female inhabitant *** having an independent income,” as used in the statutes concerning personal taxes, was not intended to include the case of a woman who is supported by her husband but who occasionally makes a little money through her own exertions. TAXATION; EQUALITY AND UNIFORMITY Neither in the federal constitution nor in the Organic Act of the Territory of Hawaii is there any requirement that taxation in the Territory shall be equal and uniform. However, the local statutes as to personal taxes — as amended in 1923 — do not offend in the matter of inequality and non-uniformity. STATUTORY CONSTRUCTION; PRESUMPTION OF VALIDITY There is always a presumption of law, rebuttable though it is, that legislation is valid.
01/11/1919	783	Poll Tax	POLL TAX; U.S. GOV’T OFFICIALS Upon the authority of Wilder v. Noyes and Dobbins v. Commissioners of Erie County, the Territory of Hawaii is without authority to impose a poll tax upon officers of the United States Government resident in Hawaii.

Property Tax

Opinions of the Attorney General – Property Tax, by Date
Date	Number	Category	Description
08/09/1968	68-25	Property Tax	PROPERTY TAX; DELEGATION OF POWER TO COUNTIES TO SET RATES; CONSTITUTIONALITY As Article VII, Section 3, of the Hawaii Constitution expressly authorizes the legislature to delegate the State’s taxing power to the political subdivisions in the State of Hawaii, the legislature’s delegation to the counties of the power to set the real property tax rate for each respective county is constitutionally valid.
08/05/1968	68-21	Property Tax	PROPERTY TAX; RATE DIFFERENCES BETWEEN RESIDENTS AND NONRESIDENTS Section 2 of Article VI of the Constitution of the State of Hawaii precludes the State of Hawaii, in exercising its power to tax, from discriminating against nonresidents. The equal protection clauses of the State of Hawaii and United States Constitutions also proscribe, to a lesser extent, the use of a classification based on residency under the taxation power of the State of Hawaii. The equal protection clause requires only substantial equality. However, Section 2 of Article VI may bar even insubstantial rate differentials based on residency.
07/29/1964	64-39	Property Tax	TAX MAPS; PROCEDURES TO REVISE TAX MAPS; ACCRETIONS TO LAND The proper procedure for the Department of Taxation to follow, where taxpayers request the correction, change or revision of tax maps, is for the department to have such taxpayers submit proof of record title as to ownership, boundary and dimension changes. Without proper proof of title by the taxpayer supporting the changes or revisions requested, the department is under no legal duty to comply with taxpayer’s requests. In the case of taxpayers claiming ownership of land by way of accretion or adverse possession, there would need to be a judicial determination of title before they can be considered “owners” of the land.
04/16/1964	64-19	Property Tax	TAXATION STATUTES; DEFINITION OF REAL PROPERTY; FIXTURES Fixtures are not excluded from the definition of real property for property tax purposes if the fixtures are treated as real property for state law purposes. The test of whether a fixture is real property is determined by examining “the manner in which the article is attached to real estate, the character of the article and its adaptation, and the intention of the parties owning such property as to its use.”
03/25/1963	63-19	Property Tax	PROPERTY TAX; EXEMPTION FOR TENANTS OF PUBLIC PROPERTY Tenants of real property belonging to the State of Hawaii or any county thereof are not exempt from paying real property taxes.
04/17/1961	61-48	Property Tax	PROPERTY TAX; CONSTITUTIONALITY OF RATE DIFFERENCES The due process and equal protection clauses of the Hawaii Constitution require that the burden of additional taxes not be imposed arbitrarily. What constitutes a reasonable classification for taxation is not determined by any fixed rule. The legislature has broad discretion in the matter of classification and classifications are entitled to a very strong presumption that the legislature intended to act constitutionally. Thus, in the absence of a very clear case of arbitrary or discriminatory treatment, a classification for taxation should not be overturned. SAME; USE OF TAX PROCEEDS TO BUILD CASTLE MEMORIAL HOSPITAL; CONSTITUTIONALITY An appropriation of State taxes given directly to Castle Memorial Hospital, a hospital formed by members of the denomination of the Seventh-day Adventists, to be expended in the construction of a private hospital open to all the public would be for a public purpose and would not constitute an unconstitutional grant in respect to an establishment of a religion.
05/31/1957	57-47	Property Tax	REAL PROPERTY TAX; LEGISLATIVE ACTION RE:EXTENSION OF DEADLINE TO SETTING TAX RATE A legislative enactment, that is a bill or joint resolution having the force and effect of law, is necessary to change the deadline for setting real property tax rates.
10/10/1956	56-105	Property Tax	REAL PROPERTY TAX; LAND OWNED BY PHILIPPINE GOVERNMENT FOR CONSULATE Convention between the United Sates and the Republic of the Philippines (1947) specifically exempts lands owned by the Philippine Government from real property taxation.
09/24/1956	56-100	Property Tax	REAL PROPERTY TAX; LIABILITY OF LESSEE OF TERRITORIAL LANDS The Board of Harbor Commissioners was without authority or capacity to enter into a lease with the Hilo bulk sugar facility under which the Board was to pay the real property taxes on behalf of the lessee. Under the real property tax law, lessees of territorial property are required to pay any and all real property taxes assessed as if they are the owners of the land.
03/29/1956	56-43	Property Tax	REAL PROPERTY TAX; REFUNDS UNDER ACT 207, S.L. OF 1955; DEFINITION OF TAXPAYER ENTITLED TO REMISSION – LESSOR OR LESSEE The term “taxpayer” as used in Section 2, Act 207 (1955) must be read in conjunction with Chapter 94, Revised Laws of Hawaii 1945, which assesses the “owner” of the property for property taxes. A lessee of the property who pays real property taxes on behalf of the owner pursuant to the terms of a lease is therefore not the taxpayer under Act 207 and not entitled to a remission of property taxes paid.
12/23/1955	55-123	Property Tax	PROPERTY TAX; EXEMPTION; PROPERTY LEASED BY CHURCH Church lease construed as being for term of at least one year and continuing in effect on January 1 is entitled to exemption from real property tax.
02/21/1955	55-17	Property Tax	PROPERTY TAX; EXEMPTION; CONVICTED FELON The fact that a property owner is convicted of a felony does not disqualify the person from exemption from property tax.
09/04/1953	1860	Property Tax	PROPERTY TAX; LEASES MADE BY THE UNITED STATES The lessee of United States land, erecting military housing thereon pursuant to a lease made under 12 U.S.C. 1748d, incorporating by reference 5 U.S.C. 626s-6, 10 U.S.C. 1270d, and 34 U.S.C. 522e, is subject to real property taxes on the value of the lessee’s interest.
04/10/1942	1813	Property Tax	PROPERTY TAX; EXEMPTIONS; DETERMINATION DATE; LEASE WITH UNITED STATES; The status of real property is determined as of January 1 of the assessment year and land privately owned on that date and not under lease does not become exempt for the current year by reason of the later execution of a lease with the United States containing a tax exemption clause; Act 143 (Ser. A-58) L. 1941 construed. SAME, SAME; SAME The purpose of the requirement that certain tax exemptions be claimed on or before January 31 of the assessment year is merely to aid the assessor by providing for the early presentation of exemption claims, and whether or not such claim is required the rule is that the status of the property is to be determined according to the facts as they stood on January 1. SAME; SAME; SAME Where an exemption is not required to be claimed and exempted property has been assessed a correction may be made prior to the date of filing of the assessment list; as to whether a change in the assessment list on this ground might be made thereafter no opinion is expressed.
02/06/1942	1800	Property Tax	PROPERTY TAX; EXEMPTION; QUEEN’S HOSPITAL Subsection 2 of Section 1977, R.L. 1935, does not require the Queen’s Hospital to maintain a ward of eight free beds in order to qualify for a tax exemption. TAXATION, GENERALLY; STATUTES; CONSTRUCTION The rule that qualifying words apply to the phrase immediately preceding, considered.
09/17/1937	1657	Property Tax	PERSONAL PROPERTY TAX; TAX LIEN A lien for personal property taxes exists in favor of the Territory by statute.
07/07/1936	1642	Property Tax	REAL PROPERTY TAX; HOME EXEMPTION Under section 1974, R.L. 1935 home owners, to be allowed exemption, are entitled to rent only one room and cannot rent bath in connection with bedroom.
04/05/1934	1601	Property Tax	REAL PROPERTY TAX; TAX RATE CALCULATIONS, DEDUCTIONS FROM For the reasons stated in Op. Att’y Gen. No. 1600 (1934) and under the first subparagraph of paragraph (3) section 12, Act 19, 1st Sp. S.L. 1932, surplus liquid fuel tax collections in a county existing as of December 31 of the year preceding the current tax year must be deducted by the board of supervisors or such county from the estimated requirements for permanent improvements in the county property tax budget (item 9, section 21, Act 40, 2nd Sp. S.L. 1932), and surplus collections of such taxes estimated as of December 31 deducted in such budget for such year.
01/26/1934	1600	Property Tax	REAL PROPERTY TAX; DEDUCTIONS FROM TAX RATE CALCULATIONS Under section 21, Act 40, 2nd Sp. S.L. 1032, amending by implication section 12, Act 19, 1st Sp. S.L. 1932, deductions from the real property tax rate calculations for a county on account of liquid fuel tax surplus or estimated collections are to be made by the county board of supervisors as deductible items under Column II of the county budget, and are not to be made by the Territorial Treasurer from the total figure set forth in item 11 under Column III of such budget.
09/11/1933	1598	Property Tax	PROPERTY TAXATION; TAX LIEN, FORECLOSURE OF Real property, or improvements on land validly assessed separately may be sold at a tax sale by way of foreclosure of a tax lien thereon for less than the full amount of all taxes, penalties, interest and other charges due thereon. SAME; SAME Upon tax sale by way of foreclosure of tax lien, the lien is ordinarily extinguished, notwithstanding that the sale may be for less than the full amount of taxes, penalties, interest and other charges due.
09/03/1932	1590	Property Tax	PROPERTY TAX; APPEAL FROM ASSESSMENT Upon appealing from an assessment for real property taxation purposes to a board of review under Section 38, Act 40, Second Special Session of 1932, the taxpayer must state the valuation claimed by him.
09/03/1932	1591	Property Tax	PROPERTY TAX; ASSESSMENT AMOUNT WHEN VALUATION UNDER APPEAL Amount of tax bills on appealed assessments should be as originally valued.
03/09/1928	1467	Property Tax	PROPERTY TAX; MAINLAND STOCKS AND BONDS Mainland stocks and bonds owned by local enterprise for profit taxable under last ruling of Hawaii Supreme Court.
02/02/1928	1463	Property Tax	PROPERTY TAX; PERSONAL PROPERTY IN USE UNDER FEDERAL CONTRACTS Personal property situated in Hawaii, although employed in the performance of a contract with the Federal Government, is taxable by the Territory.
08/11/1927	1449	Property Tax	PROPERTY TAX; ASSESSMENT OF UNKNOWN OWNERS Before the Assessor can legally assess property to “Unknown Owners,” he must use all reasonable means at his command to ascertain the name of the owners, and must at least consult the public records.
01/05/1927	1404	Property Tax	PROPERTY TAX; EXEMPTION FOR PROPERTY OF A RELIGIOUS SOCIETY Where a parsonage or other property of a religious society used only for religious purposes but not as a church site or burial ground is not contiguous to the church site or a part hereof, it is not exempt from taxation. TAXATION; EXEMPTION FOR PROPERTY OF A RELIGIOUS SOCIETY Where property of a religious society, a part of the grant of a church site, is separated from the church site by the government road the land for which was granted to the government by the church, but is used solely for church purposes, it is exempt from taxation.
05/13/1926	1348	Property Tax	PROPERTY TAX; FOREST LAND EXEMPTION Upon full compliance with the terms of Section 1326, Revised Laws, 1925, an exemption from taxation on forest land follows even though the land is under lease with the taxes payable by the lessor.
02/16/1926	1319	Property Tax	PROPERTY TAX; CLAIMS OF EXEMPTION FOR COUNTY OR TERRITORIAL PROPERTY The provisions of Section 10 of Act 192, S.L. 1925 relating to claiming exemption from taxation do not apply to the Territory or any County or City and County.
06/19/1925	1228	Property Tax	EXEMPTION FOR PROPERTY LEASED TO TERRITORY An exemption from taxation under the statute taking effect in the month of April, does not exempt the property mentioned from taxation for the current year, all taxes becoming fixed on January 1st. PROPERTY TAX; DEFENSES AGAINST COLLECTION OF SAME Where the Territory, as lessee, covenants to pay all taxes on leased property, and fails to do so, the lessor has a defense, by way of equitable set-off, to any suit brought by the Tax Assessor to enforce against the lessor payment of said taxes.
05/13/1925	1217	Property Tax	TAXATION STATUTES; CONSTRUCTION The reason and intent of the Legislature will control the strict letter of the law when the letter would lead to palpable injustice. TAXATION STATUTES; CONSTRUCTION The Legislative history of an Act may be consulted to aid in its construction. TAXATION STATUTES; CONSTRUCTION There is a presumption against a construction which will render a statute ineffective or inefficient. PROPERTY TAX; APPROPRIATIONS FOR REPAYMENT OF TAXES “WRONGFULLY COLLECTED” An appropriation to repay taxes “wrongfully collected” from the Bishop Estate upon lands under lease to the Territory, is proper, when the terms of the lease require the Territory to pay all taxes.
12/29/1922	1060	Property Tax	TAXATION OF MONEYS IN HAND; TERRITORIAL MONEYS IN BANKS Section 1240, as amended, and Section 1246, as amended, of the Revised Laws provide, respectively, for the taxing of “moneys in hand” and for the exemption from taxation of “real and personal property belongs to from taxation of “real and personal property belongs to the Territory”. No “moneys in hand” at the banks used as Territorial depositaries–under Chapter 87 of the Revised Laws– are exempt from taxation as Territorial property, notwithstanding the words, in Section 1165, shall be deemed to be in the territorial treasury.
04/21/1922	1017	Property Tax	PROPERTY TAX; PUBLIC UTILITY The power granted to the East Kauai Water Company, Limited, by its Articles of Association construed to be such as to exempt the property of that company from taxation under the provisions of Section 1250, R.L.H. taxation under the provisions of Section 1250, R.L.H. 1915, as amended by Act 110, S.L. 1917.
04/20/1922	1016	Property Tax	PROPERTY TAX; GENERAL LEASE OF PUBLIC LANDS No deduction may be allowed to a taxpayer for the amortization of the value of a general lease of public lands. SAME; SAME No deduction should be allowed for the amortization of the value of buildings erected on leased public lands, but depreciation should be allowed. SAME; A LEASE OF PRIVATELY OWNED LANDS A deduction should be allowed for the amortization of the value of a lease of privately owned lands. SAME; UNCOMPLETED YACHT A power yacht uncompleted on the first of January, 1922, should be taxed on the basis of the value of labor and materials incorporated into it on that date. SAME; LICENSE A license issued by the Commissioner of Public Lands covering public lands should be treated as a general lease and taxed accordingly.
03/09/1922	1013	Property Tax	PROPERTY TAX; PROPERTY OF RELIGIOUS SOCIETIES, EXEMPTION OF A piece of property belonging to a religious society occupied as a home for the priest of that society is not exempt from taxation. TAXATION; EXEMPTION FROM TAXATION; EXEMPTION FROM Statutes relating to exemptions must be strictly construed.
03/03/1922	1012	Property Tax	PROPERTY TAX; EXEMPTION FOR HOMESTEADS The amount of land surrounding a residence or home which may be included in estimating the tax exemption provided for by Act 33, S.L. 1920, is a question of fact to be determined in each case.
01/08/1919	781	Property Tax	PROPERTY TAXATION; GENERAL LEASES OF PUBLIC LANDS General leases of public lands are taxable under the provisions of Section 385, R.L.H. 1915. SAME; SAME Section 6 of Act 222, S.L. 1917 being an amendment only of Section 1242, R.L.H. 1915, does not operate as an amendment of Section 385, R.L.H. 1915. SAME;SAME Section 385, R.L.H. 1915, being a part of the Land Laws of the Territory in force on the date of the passage of the Organic Act, the local Legislature is without authority to amend, alter, or repeal the same.
10/10/1918	748	Property Tax	PROPERTY TAXATION; GENERAL LEASES Section 6 of Act 222, S.L. 1917, does not repeal, either directly or by implication, Section 385, R.L.H. 1915. SAME; SAME; LEGISLATIVE AUTHORITY TO CHANGE The Legislature of the Territory of Hawaii is without authority to repeal or amend Section 385, R.L.H. 1915, for the reason that that section constituted a part of the land laws of the republic that were in force at the time of annexation and can be changed only by Congress.
09/01/1917	685	Property Tax	PROPERTY TAXATION; EXEMPTION FOR RELIGIOUS SOCIETY All real and personal property belonging to religious societies and in actual use of such societies, is exempt from taxation.
06/26/1917	672	Property Tax	PROPERTY TAXATION; EXEMPTION FROM A person owning but one piece of property and residing in a different taxation district from which that property is situated is entitled to the exemption named in Section 1251, R.L. 1915.
03/28/1916	501	Property Tax	TAXATION; ASSESSMENTS OF LAND HELD BY HUI Taxes should be assessed to the individual members of the hui upon their respective interests and not to the hui as a whole.
01/11/1915	401	Property Tax	TAXATION; MILITARY RESERVATION Privately owned personal property of residents of military reservations situated within the Territory of Hawaii is subject to taxation.

Public Utilities

Opinions of the Attorney General – Public Utilities, by Date
Date	Number	Category	Description
10/05/1943	1838	Public Utilities	TAXATION; LOSS ON SUPERSESSION OF EQUIPMENT In the computation of net income for determination of the ratio of net income to gross income, the loss on supersession of equipment because of extraordinary obsolescence is not deductible. SAME; SAME; SAME In the computation of net income for determination of the ratio of net income to gross income supersession loss cannot be charged to operating expense over a period of years following the retirement of the property. SAME; SAME; SAME The treatment of supersession loss by public utilities commissioners is a matter of administrative policy as to whether the investors or the consumers should bear the loss, and even if the public utilities commission had permitted the loss to be amortized by charges to operating expense account its decision would not have been binding for tax purposes. SAME; NATURE OF TAX The public utilities tax is in the nature of a property tax, the net income being an element in the tax rate formula in order to reflect the value of the property, on the same principle as was used in valuing property by capitalization of net income for purposes of the former “enterprise for profit” tax; the loss on abandonment of old property has no bearing on the value of the new property. SAME; DEDUCTION FOR FEDERAL TAXES Interest on an assessment of additional federal taxes may be deducted in computing net income for determination of the ratio of net income to gross income. SAME; SAME In the computation of net income for public utility tax purposes a company on the accrual basis must allocate additional federal taxes to the year of accrual, not the year of payment.
11/12/1940	1751	Public Utilities	TAXATION; PUBLIC UTILITIES; LIABILITY FOR TAX The liability of a company for public utilities tax does not depend upon its having a certificate of public convenience and necessity under Section 7958, R.L. 1935, it being sufficient that it falls within the definition of ‘public utility” contained in Section 7940, R.L. 1935. SAME; EXEMPTIONS; MEASURE OF TAX The public utilities tax is to be computed upon the full twelve months gross income of the preceding year even though the company was exempt from the tax during a portion of the preceding year. SAME; SAME; SAME The public utilities tax is to be computed upon the full twelve months gross income of the preceding year even though the statute to which reference is made in the tax act stated that the term “public utility” should not include the company until June 30 of said preceding year. SAME; NATURE OF TAX; TAX YEAR The Public Utilities Tax is in the nature of a property tax, imposed as of January 1 for the tax year then commencing, measured by the gross income from public utility business of the preceding year computed under the law as it reads as of January 1 of the tax year.
10/29/1940	1748	Public Utilities	TAXATION; PUBLIC UTILITIES; NON-OPERATING INCOME The public utilities tax applies to gross non-operating income as well as to the gross operating income from the public utility business. SAME; SAME Where a company has both a utility and non-utility business the income from investments derived from public utility funds is subject to the public utilities tax. SAME; EXEMPT INCOME Constitutional immunity from taxation, such as in the case of federal bonds, applies to the public utilities tax, as does immunity conferred by territorial law upon the issuance of territorial or county bonds, but exemptions, such as the exemption of dividends contained in the income tax law, do not apply.
04/21/1939	1701	Public Utilities	TAXATION; PUBLIC UTILITIES; TAX RATE, COMPUTATION OF The amount credited to reserve for industrial accident awards is not a proper deduction from gross income in arriving at the net income for the purpose of determining the tax rate of a public utility. WORKMEN’S COMPENSATION; RESERVE FOR AWARDS, NATURE OF The setting up a reserve for individual accident awards by a self-insured does not of itself create an expense, and such amount is not deductible in arriving at the public utility tax rate of such self-insurer. TAXATION; PUBLIC UTILITIES; TAX RATE; COMPUTATION OF Industrial accident compensation payments by a self-insurer are the cost of doing business as is the cost of insurance.
04/10/1935	1615	Public Utilities	TAXATION; PUBLIC UTILITIES; EXEMPTION Section 1978, R.L. 1035 (Act 95, L. 1927) exempts from all property taxes for a period of ten years, all property actually and solely used in the construction, operation or maintenance of any water system, operated for the purpose of supplying water to the general public. TAXATION; PUBLIC UTILITIES; NATURE OF TAX Chapter 69, R.L. 1935 levies an excise tax upon such gross income of a public utility as is derived from its public utility business. TAXATION; NATURE OF TAX ON GROSS INCOME Although a tax upon gross income may be deemed an excise tax it may also be considered a property tax. TAXATION; PUBLIC UTILITIES; EXEMPTION The tax upon gross income derived from a public utility’s property, levied by said Chapter 69, is a tax upon the property producing the income, and the company, if of the nature specified in said section 1978, is exempt from the payment of the tax to the extent that its gross income is derived from property actually and solely used in the construction, operation, or maintenance of any water system operated for the purpose of supplying water to the general public. STATUTES; CONSTRUCTION AND OPERATION The intention to grant an exemption must be expressed in clear and unmistakable terms, for it is a well-settled principle that, when an exemption is claimed under a statute, it is to be construed strictly against the property owner and in favor of the public.
03/29/1919	817	Public Utilities	TAXATION; SECTION 5 OF ACT 222 OF THE SESSION LAWS OF 1917 CONSTRUED A railway company which merely incidentally crosses the public highway in two places does not occupy the public streets or highways of the Territory, within the meaning of Section 5 of Act 222 of the Session Laws of 1917

Public Welfare Tax

Opinions of the Attorney General – Public Welfare Tax, by Date
Date	Number	Category	Description
11/18/1942	1827	Public Welfare Tax	PUBLIC WELFARE TAX; TAXABILITY OF DISTRIBUTIONS OF CORPORATION Distributions of earned surplus, made in liquidation of a corporation, are subject to public welfare tax. SAME; SAME The distributions subject to public welfare tax are not limited to the profit arising after the stockholder receives back his investment in the stock.

Refund of Illegal Taxes

Opinions of the Attorney General – Refund of Illegal Taxes, by Date
Date	Number	Category	Description
12/07/1915	473	Refund of Illegal Taxes	TAXATION; REFUNDS Waimanalo Plantation Co. – Refund of Taxes illegally collected

Refunds

Opinions of the Attorney General – Refunds, by Date
Date	Number	Category	Description
01/26/1962	62-4	Refunds	REFUNDS; EFFECT OF LEVY ON REFUNDS BY U.S. TREASURY DEPARTMENT
02/24/1956	56-25	Refunds	REFUNDS; STATUTES; DEFINITION OF “REMIT”; PROPERTY TAX; GENERAL EXCISE TAX; The word “remit” as used in Act 207, Session Laws of Hawaii 1955, does not contemplate refunding of real property tax paid in 1955, but does require the Tax Commissioner to refund gross income taxes paid for the year.

Tax Clearance

Opinions of the Attorney General – Tax Clearance, by Date
Date	Number	Category	Description
01/12/1995	95-1	Tax Clearance	TAX CLEARANCES; LIQUOR LICENSE RENEWAL A taxpayer’s agreement to pay its delinquent taxes, pursuant to a payment schedule, does not satisfy the requirements for obtaining a tax clearance for liquor license renewal.
03/22/1962	62-14	Tax Clearance	TAX CLEARANCES; PERSONAL SERVICE CONTRACTORS DOING BUSINESS WITH COUNTIES; HAWAII REDEVELOPMENT AGENCIES

Tax Collection

Opinions of the Attorney General – Tax Collection, by Date
Date	Number	Category	Description
09/06/1918	734	Tax Collection	PROPERTY TAXATION; COLLECTION The lien for taxes due upon real property described in Section 1291, R.L.H. 1915, may be foreclosed under the provisions of Section 1292 without suit. SAME; SAME All other taxes due at the time of the foreclosure of tax lien may be paid from the proceeds of such foreclosure.
04/14/1916	507	Tax Collection	TAXATION; STATUTES; RETROACTIVE Validity of retrospective law. INTEREST A statute providing for interest at a given rate but omitting the words “per annum” construed as providing for an annual rate. TAXATION; COMPROMISE OF AMOUNT DUE A tax collector has no power to compromise with a delinquent taxpayer by accepting less than the full amount due.

Tax Lien

Opinions of the Attorney General – Tax Lien, by Date
Date	Number	Category	Description
11/07/1957	57-143	Tax Lien	TAX LIEN; WHETHER MORTGAGE OF LEASEHOLD INTEREST IS MORTGAGEE OF REAL PROPERTY FOR PURPOSES OF LIEN STATUTE A leasehold for a term of one year is considered real property for purposes of the recording statute, and therefore a prior recorded mortgage on such leasehold is paramount to a subsequent tax lien on the leasehold.

Tax Rate

Opinions of the Attorney General – Tax Rate, by Date
Date	Number	Category	Description
03/29/1930	1556	Tax Rate	PROPERTY TAX; WHAT CONSTITUTES DEFICIENCIES FOR PREVIOUS YEAR TO BE ADDED TO CURRENT YEAR’S TAX RATE Under Section 1315 and 1380, R.L. 1925, as amended, the questions as to the existence and amount of deficiency for the next preceding calendar year in satisfying the requirements of a county or city and county for such year for the purpose of calculating the tax rate for such county or city and county for the current calendar year, are to be determined by the state of facts existing on December 31st of such preceding year, and are not affected by events transpiring thereafter, such as the collection of delinquent taxes STATUTES; SECTIONS 1315 AND 1380, R.L. 1925, AS AMENDED, CONSTRUED.
08/31/1929	1537	Tax Rate	TAXATION; INTEREST AND SINKING FUND RELATING TO TERRITORIAL BONDS Joint Resolution No. 5 of the regular Session of 1929 of the Territorial Legislature, approved May 1, 1929, does not “otherwise provide for” the payment of interest and sinking fund charges for Territorial bonds issued for harbor improvements within the meaning of Section 1315, R.L. 1925, as amended by Act 192, S.L. 1925, so as to forbid the levy of a property tax therefor under subdivision 4-A of said Section, as amended.
05/16/1927	1435	Tax Rate	TAXATION; SINKING FUND; TAX RATE BASED ON RETIRING BONDS AT MATURITY DATE The Treasurer, in fixing the tax rate on real and personal property for 1927 (to include provision for the Sinking Fund on Territorial Bonds and to repair a shrinkage therein) should, under the provisions of Act 174, S.L. 1927, based on his computation on the maturity date of the bond issue involved, rather than on the redeemable date thereof, and adopt four per centum as the basis of interest computation as provided by Act 247, S.L. 1927.
06/20/1925	1230	Tax Rate	TAXATION; CHANGE OF TAX RATE Under Act 119, S.L. 1925, the establishing of an additional tax rate for 1925 (to include the sum of $70,000 for Leahi Home) being discretionary with the Board of Supervisors, and said Board failing to notify the Treasurer of its election to call for an additional tax rate until after the rate for 1925 had been lawfully and reasonably fixed, the Treasurer is without authority to change said rate to provide for the raising of said sum.
05/07/1925	1214	Tax Rate	TAXATION; ESTIMATES FOR TAX RATE The Treasurer may not require the various Boards of Supervisors, in making their estimates under subdivisions 1, 2 and 3 of Section 1315 of the Revised Laws of Hawaii 1925, to include a detailed statement of receipts for the preceding year, as shown on the books of the City and County Auditor, and hence need not fix the respective amounts in dollars for subdivisions 1 and 2 of said section, at a figure ten percent (10%) less than that for the preceding year, when a Board of Supervisors fails to amend its previous estimate in accordance with a demand by the Treasurer that it include, among other things, such information.

Tobacco Tax

Opinions of the Attorney General – Tobacco Tax, by Date
Date	Number	Category	Description
11/21/1941	1792	Tobacco Tax	TOBACCO TAX; SAME Sales to the United States are exempt from liquor and tobacco taxes.

Transient Accommodation Tax

Opinions of the Attorney General – Transient Accommodation Tax, by Date
Date	Number	Category	Description
09/04/1990	90-6	Transient Accommodation Tax	TRANSIENT ACCOMMODATION TAX; RENTAL TO AIRLINES FOR MORE THAN 180 DAYS The rental of hotel rooms to airlines under leases with a term of 180 days or more (for use of crew members on Hawaii stop overs) is not subject to transient accommodations tax. The airlines are not transients because they do not stay for only a short and temporary period or come and go with only a brief stop, but rather, occupy the rooms for extended periods as an integral part of conducting business operations in Hawaii.

Unemployment Tax

Opinions of the Attorney General – Unemployment Tax, by Date
Date	Number	Category	Description
03/20/1940	1730	Unemployment Tax	UNEMPLOYMENT TAX; EXEMPTION FOR NATIONAL GUARDSMEN Compensation received from the United States by officers and enlisted personnel for service in the National Guard is not exempt from the Unemployment and Relief Tax under Act 241, Laws 1939.
12/8/1939	1728	Unemployment Tax	UNEMPLOYMENT TAX; FEES RECEIVED BY A SHERIFF OR DEPUTY Fees received and retained by a sheriff or his deputy are subject to the Unemployment and Relief Tax under Act 241, Laws 1939.
06/19/1939	1713	Unemployment Tax	UNEMPLOYMENT TAX; DIVIDENDS OF NATIONAL BANKS, TAXABILITY OF The dividends of national banks, local as well as those not doing business in the Territory, are not subject to the unemployment relief tax. SAME; DIVIDENDS OF FOREIGN CORPORATION; RETURNS AND PAYMENTS OF TAX NOT WITHHELD The dividends of foreign companies received by individuals are required to be returned by section 8 of the unemployment relief tax law, and pursuant to section 13 the tax commissioner, by rule, may provide for the return and payment of the tax on dividends of foreign corporation received by corporations, partnerships, associations, trusts, estates and other entities. SAME; FEES AND COMMISSIONS; RETURNS AND PAYMENTS OF TAX NOT WITHHELD Pursuant to section 13, the tax commissioner, by rule, may provide for the return and payment of the tax on compensation, including fees, commissions, bonuses, etc., not included in the measure of the gross income tax.
06/16/1939	1712	Unemployment Tax	UNEMPLOYMENT TAX; TERRITORIAL SHOP FOR THE ADULT BLIND; STATUS OF WORKERS Blind persons employed by the territorial shops for the adult blind are not employees of the Territory. SAME; TAXABILITY OF WORKERS Blind persons, working in territorial shops for the adult blind are not subject to the unemployment relief tax but are subject to the gross income tax.

Use Tax

Opinions of the Attorney General – Use Tax, by Date
Date	Number	Category	Description
11/05/1964	64-52	Use Tax	USE TAX; FOREIGN TRADE ZONE; IMPORTED GOODS INCORPORATED INTO FINISHED PRODUCTS MANUFACTURED FOR RE-EXPORT Corporation engaged in business within the zone, which imports goods from another state or from a foreign country which are incorporated into a finished product for purposes of re-export, is not liable for use tax on such imported goods. SAME; SAME; GOODS SOLD BY FOREIGN TRADE ZONE BUSINESS TO HAWAII BUSINESS FOR USE IN THE STATE OF HAWAII If a Hawaii buyer uses and consumes the goods in the State of Hawaii, the buyer is subject to the use tax.
04/16/1959	59-44	Use Tax	USE TAX; IMPORTED CHEMICALS USED IN PROCESSING LUMBER Chemicals imported for use in treating lumber to be sold by taxpayer is not subject to consumption tax. However, chemicals used in processing the lumber of others is taxable, even though such other persons may sell the lumber so processed by the taxpayer. The exemption to the consumption tax only applies to products to be sold by the taxpayer, and does not apply to products to be sold by persons other than the taxpayer.
01/30/1956	56-15	Use Tax	USE TAX; EXEMPTION FOR INSURANCE COMPANIES Insurance company is subject to consumption tax on the value of automobiles brought into the Territory for its own use. Insurance company tax was never intended to be “in lieu” of the consumption tax upon a specific purchase.

Page Last Updated: January 27, 2023