DOTAX: Announcement 2002-04

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DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2002-4
February 28, 2002

RE: Electronic Filing Approved as a Means of Electronic Funds Transfer

I. Electronic Filing Through the Internet

Electronic filing (ELF) for Hawaii tax forms and payment of taxes is available through the State of Hawaii's Internet portal at www.ehawaiigov.org/efile. 1

The following forms and transactions are currently offered:

Individual income tax return short form (Form N-13),
Extension of time to file the income tax return (Forms N-100, N-101A, N-301),
Estimated income tax vouchers and payments (Forms N-1, N-3, and N-5),
Application for a one-time event general excise tax license number (Form G-5),
Periodic general excise tax returns and payments (Form G-45),
Extension of time to file the general excise tax annual return (Form G-39),
Annual general excise tax return and payment (Form G-49),
Periodic transient accommodations tax returns and payments (Form TA-1),
Annual transient accommodations tax return and payment (Form TA-2),
Extension of time to file the transient accommodations tax annual return (Form TA-8),
Periodic employer's withholding tax returns and payments (Form HW-14), 2
Extension of time to file the Employer's withholding tax annual return (Form HW-26),
Application for a tax clearance (Form A-6),
Extension of time to file the rental motor vehicle/tour vehicle surcharge annual return (Form RV-7), and
Delinquent bill payments for general excise tax, use tax, employer's withholding tax, transient accommodations tax, rental motor vehicle and tour vehicle surcharge tax, and net income tax.

II. ELF is a Means of Electronic Funds Transfer

Hawaii Revised Statutes (HRS) §231-9.9 provides for the payment of taxes by means of Electronic Funds Transfer (EFT) and applies to: (1) taxpayers with tax liabilities exceeding $100,000 who are notified and required by the Department to pay taxes by means of EFT; and (2) taxpayers who (with the approval of the Department) elect to pay taxes by means of EFT (i.e., their tax liability does not exceed $100,000).

The Department announces that ELF is an approved means of EFT. HRS § 231-1, defines the term EFT as "any transfer of funds that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account but shall not include any transfer originated by check, draft, or similar paper instrument."

ELF payments are made using a credit card or an electronic check process called "VirtualPay". The maximum amount of taxes that may be paid through "VirtualPay" is $250,000 per transaction. A fee of $2.50 is imposed for each transaction involving a payment (no fee is imposed if there is no payment due or made). ELF payments also may be made by American Express, Discover, Visa or Mastercard credit card, up to a maximum of $10,000 per transaction, with a fee imposed.

ELF payments are timely if the payments are made through the Internet on or before the prescribed date for payment. The penalty for a late payment applies if the payments are made after the prescribed date. ELF payments are considered made on the date the payment was authorized by the taxpayer.

III. EFT Taxpayers May Continue To Make Payments Using The ACH Debit or Credit Method

EFT taxpayers may continue to make payments using the ACH Debit or Credit method without using ELF.

EFT taxpayers also may make payments using ELF by registering on the Internet, but otherwise are not required to notify the Department that they are using ELF. EFT taxpayers must remit the amount of taxes required under the EFT rules, whether the remittance is made through EFT or ELF.

Example: An EFT taxpayer that has a general excise tax liability of $9,000 for the month of January, 2002. The taxpayer registers for ELF to file the January return and to remit the taxes due. The taxpayer must remit $9,000 through EFT (the ACH debit or ACH credit method) or ELF.

For more information or to register for ELF, go to the State's Internet portal at www.ehawaiigov.org/efile or visit the Department's website at www.hawaii.gov/tax.

Current forms and other tax information are available at the Department’s website at: www.hawaii.gov/tax. On Oahu, forms may be ordered by calling the Department’s Forms Request Line at: 587-7572. Persons who are not calling from Oahu, may call: 1-800-222-7572 (toll-free) to receive forms by mail or by fax.

/s/
MARIE Y. OKAMURA
Director of Taxation

HRS sections explained: HRS §231-1, 231-9.9
HAR sections explained: HAR §18-231-9.9-01 to 18-231-9.9-11

FOOTNOTES

1 Some of the advantages of ELF are:

Convenience and ease of filing a tax return and paying taxes without mailing documents,
Quicker tax return processing,
Printed confirmation of tax return filed and payment,
Payment by credit card is available, and
Easy access to ELF records.

2 The employer's withholding tax annual returns (Form HW-3) and payments, however, must be filed in paper form with the Department because of the attachment of the W-2 forms. See Tax Information Release No. 99-1, dated January 5, 1999, page 1.