Saturday, September 15, 2012
DoTax Issues 12 Tax Announcements
By News Release @ 10:27 PM :: 5331 Views :: Energy, Environment
Message from the Department of Taxation
September 10, 2012
Recent news stories about the renewable energy tax credit have prompted several inquiries to the Department of Taxation. Here are the pertinent facts:
Right now, there is no change in the tax law or its application. The new temporary administrative rules have NOT been issued yet.
When the Department issues the new rules, they will be effective for systems installed and placed into service effective January 1, 2013.
The reason for the new administrative rules is to provide clarity and fairness to all taxpayers. During the last legislative session, concerns about the renewable energy tax credit were raised by legislators and taxpayers. Since there was no change in the statute, the Department is using its authority to adopt administrative rules to address the concerns.
Tax Announcements 2012-01 through 2012-12
August 15, 2012
Tax Announcement 2012-01 - Composite Filing of Forms N-342 and/or N-342A for Taxpayers Claiming the Renewable Energy Technologies Income Tax Credit, HRS § 235-12.5 for 10 or More Systems
The Renewable Energy Technologies Income Tax Credit ("Renewable Energy Credit") provided by § 235-12.5, Hawaii Revised Statutes ("HRS"), is claimed by filing a separate Form N-342 for each eligible system for which the taxpayer is claiming the Renewable Energy Credit.
Tax Announcement 2012-02 - Act 067, Session Laws of Hawaii 2012, Relating to the Tax Lien and Encumbrance Record
Act 067 allows the Department of Taxation (Department), as well as other governmental unit, to record a lien against any vehicle owned by a taxpayer for any amounts owed. Unless the amount so recorded is paid, the taxpayer will be unable to renew, register, or transfer ownership of the vehicle.
Tax Announcement 2012-03 - Act 220, Session Laws of Hawaii 2012, Relating to Taxation
Act 220 has two major components. The first establishes a revised Estate and Generation-Skipping Transfer Tax as a new chapter within the Hawaii Revised Statutes, and is effective for decedents dying or taxable transfers occurring after January 25, 2012. The second component extends the provisions of Act 166, Session Laws of Hawaii 2007, which exempts from taxation the capital gains realized on the sale of the fee interest in leasehold condominium units when sold to the association of apartment owners or residential cooperative corporations, (which had been scheduled to sunset on January 1, 2013) until January 1, 2018.
Tax Announcement 2012-04 - Act 179, Session Laws of Hawaii 2012, Relating to Conformity of Hawaii Income Tax Law to the Internal Revenue Code and Act 184, Session Laws of Hawaii 2012, Relating to Taxation
Section 2 of Act 179 amends section 235-2.3(a), HRS, to conform the Hawaii Income Tax Law to the operative IRC sections of Subtitle A, Chapter 1, amended as of December 31, 2011. Generally, Subtitle A, Chapter 1, refers to sections 1 through 1400T, IRC.
A summary of the relevant federal laws that were enacted in 2011 and their impact on Hawaii Income Tax Law follows: ....
Tax Announcement 2012-05 - Act 180, Session Laws of Hawaii 2012, Relating to Tax Clearance Fees
Act 180 allows the Department of Taxation to impose a $20 fee for a tax clearance application and a $5 fee to obtain a certified copy of a tax clearance for requests for tax clearances and requests for certified copies of tax clearances received on or after July 1, 2012.
The Department has decided that it will not implement these new fees until further notice.
Tax Announcement 2012-06 - Act 188, Session Laws of Hawaii 2012, Relating to Taxation
Act 188 extends the sunset date for the special fuel tax rate applied to naphtha fuel sold for use in a power-generating facility. The sunset date is extended to December 31, 2015.
Tax Announcement 2012-07 - Act 182, Session Laws of Hawaii 2012, Relating to Foreclosures
Act 182 implements the recommendations of the mortgage foreclosure task force created by Act 162, Session Laws of Hawaii 2010. The Department notes that several procedures in the foreclosure process described in Act 182 require service upon the Director of Taxation. The Department will accept service by certified mail in all situations described in Act 182 in which service by mail is permissible.
Tax Announcement 2012-08 - Act 165, Session Laws of Hawaii 2012, Relating to Interisland Transmission Cable Systems
This Act makes several amendments pertaining to income received by an electric utility company in the form of a "cable surcharge." Specifically, Act 165 amends Section 235-7, Hawaii Revised Statutes, (HRS) to exclude such amounts from a calculation of gross income, adjusted gross income, and taxable income.
Tax Announcement 2012-09 - Act 219, Session Laws of Hawaii 2012, Relating to Taxation
Act 219 mandates that "nonprofit organizations" be given written notice of noncompliance with § 237-9.3, Hawaii Revised Statutes ("HRS"). Upon receipt of such notice, the "nonprofit organization" has 90 days to become compliant before the denial of general excise tax benefits. Act 219 is effective July 1, 2012.
Tax Announcement 2012-10 - Act 185, Session Laws of Hawaii 2012, Relating to Taxation
Act 185 prevents the 20% penalty for erroneous claims for refund or credit under § 231-36.8, HRS, from being imposed where a 20% penalty has already been imposed for substantial understatements or misstatements under § 231-36.6, HRS, for the same tax underpayment.
Tax Announcement 2012-11 - Rental Motor Vehicle Surcharge Tax Rate after June 30, 2012
On July 10, 2012, the Governor vetoed SB 2946. Therefore, effective July 1, 2012, the RV tax rate has reverted back to $3 per day or portion of a day.
In the event a taxpayer has separately stated and visibly passed on the tax at the $7.50 rate for any rental motor vehicle day or portion of a day occurring after June 30, 2012, the taxpayer should refund the excess $4.50 per day to its client and only remit to the Department $3 per day or portion of a day occurring after June 30, 2012.
Tax Announcement 2012-12 - Act 326, Session Laws of Hawaii 2012, Relating to Taxation
The Act requires operators of transient accommodations to do the following:
* Designate a local contact residing on the same island as the transient accommodation.
* Provide the local contact's contact information to any entity with covenants, bylaws or administrative provisions operational with respect to the property on which the transient accommodation exists (e.g., an association of apartment owners). Such information must be updated within 60 days of any change.
* Include the local contact's name and phone number in any contract or written rental agreement.
* Provide on a website or by online link and display in all advertisements and solicitations on websites the registration identification number issued under HRS § 237D-4. This registration identification number is also sometimes referred to as the TAT tax license number. Please also note that for some taxpayers the TAT tax license number may contain a different suffix from the taxpayer's GET tax license number.