Act 262 allows contractors to report the general excise tax (GET) on a cash basis provided the contractors notify the Department of Taxation. Act 262 applies to gross proceeds or gross income arising after January 1, 2001.
A contractor may use special accounting methods for long-term contracts for federal and State income tax purposes (e.g., percentage of completion method and the completed contract method). For GET purposes, however, only the cash and accrual methods can be used. A contractor using the percentage of completion method or the completed contract method, therefore, must use the accrual method of reporting the GET.
Act 262 allows contractors to report the GET on a cash basis provided the contractors notify the Department (contractors may use Form GEW-TA-RV-5 to notify the Department).
Forms and other tax information are available at the Department's website at: www.state.hi.us/tax.
On Oahu, forms may be ordered by calling the Department's Forms Request Line at: 808-587-7572. Persons who are not calling from Oahu, may call: 1-800-222-7572 (toll-free) to receive forms by mail or 808-678-0522 from a fax machine to receive forms by fax.
RAY K. KAMIKAWA
Director of Taxation
HRS Sections Explained: HRS Section 237-3