RE:  Information for Taxpayers Affected by Hurricane Iniki

The Department of Taxation recognizes that many taxpayers and tax practitioners in the areas affected by Hurricane Iniki, particularly the Island of Kauai and the Waianae coast of Oahu, may be unable to meet approaching, or recently passed, State tax return filing or payment deadlines. Examples include withholding tax returns that were due September 15th; corporate income tax returns, estimated State income tax payments owed by certain corporations, individuals, trusts and estates, and franchise tax and public service company tax installment payments that are due September 21st; and general excise and use tax returns, transient accommodations tax returns, and rental motor vehicle and tour vehicle surcharge tax returns that are due September 30, 1992. The Department will provide relief with respect to these returns and payments as described below.

1. MARK RETURNS "HURRICANE INIKI"

 All returns and other documents that are filed under any provision of this announcement should be clearly marked "Hurricane Iniki" on the top center of the return or document. Do NOT place the words "Hurricane Iniki" in the "DO NOT WRITE IN THIS SPACE" area in the upper right corner of any return or document. Taxpayers and tax practitioners who want to use the provisions of this Announcement, but whose addresses are not within the areas directly affected, i.e., Kauai or Waianae, also should include a brief statement as to how the disaster adversely affected their ability to meet their tax obligations.

2. HAWAII RETURNS OF INCOME TAXES WITHHELD

Taxpayers whose returns of Hawaii income taxes withheld were due September 15, 1992, or are due on October 15, 1992, November 16, 1992, or December 15, 1992, and who, as a result of the disaster cannot meet these due dates, may file their returns and pay the tax due by January 15, 1993, without incurring any penalties. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment. No late filing penalty will be imposed for returns that are postmarked on or before January 15, 1993.

Employers having employees at several locations in the State, including locations affected by the Hurricane Iniki, should file their returns on time if they are able to do so. If complete information from locations affected by the storm is not available by the due date of the return, an amended return can be filed when the information becomes available.

3. ESTIMATED INCOME TAX PAYMENTS

Taxpayers whose estimated income tax installment payments are due September 21, 1992, October 20, 1992, November 20, 1992, or December 21, 1992, and who, as a result of the disaster cannot meet these due dates, may file their vouchers and pay the tax installment due by January 20, 1993, without incurring any penalties.

4. HAWAII INCOME TAX

Fiscal year taxpayers whose returns will be due September 21, 1992, October 20, 1992, November 20, 1992, or December 21, 1992, and who, as a result of the disaster cannot meet these due dates, may file their returns and pay the tax due by January 20, 1993, without incurring any penalties. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment. For fiscal year taxpayers who still cannot file by January 20, 1993, the Department will consider as timely any application for automatic extension of time to file that is postmarked on or before January 20, 1993. Payment of the tax estimated to be due must accompany the application for automatic extension.

The maximum extension for filing a Hawaii tax return that may be granted to taxpayers is 6 months. For corporate fiscal year taxpayers, any automatic 6 month extension will be applied from the original due date of the return. Thus, the extended due date for corporate returns due on September 21, 1992, is March 22, 1993; for corporate returns due on October 20, 1992, the extended due date is April 20, 1993; and for corporate returns due on November 20, 1992, the extended due date is May 20, 1993. Noncorporate fiscal year taxpayers may generally obtain their full automatic extension of time to file (4 months for individuals; 3 months for partnerships and trusts) computed from January 20, 1993. In no case, however, may this extension exceed 6 months from the original due date of the return. For example, if the original due date of the return is September 21, 1992, the taxpayer cannot receive an extension beyond March 22, 1993.

Taxpayers whose State income tax returns were due March 20, 1992, April 20, 1992, May 20, 1992, or June 20, 1992, and who received extensions of time to file totalling 6 months cannot be granted any further extension of time for filing beyond September 21, 1992, October 20, 1992, November 20, 1992, or December 20, 1992, respectively. Those taxpayers who, as a result of the disaster, will be unable to file by their respective extended filing dates, will be deemed to have reasonable cause for the late filing. No late filing penalty will be imposed for returns marked "Hurricane Iniki" that are postmarked on or before January 20, 1993. No penalty for late payment will be imposed with respect to those returns accompanied by payment of the unpaid reported tax due if that unpaid amount is 10 percent or less of the total tax liability shown on the return. Abatement of penalties on returns filed after January 20, 1993, (for which no further extension is permitted) will be considered on a case-by-case basis. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment.

Some tax elections are required to be made on a timely filed return. Taxpayers who must file a timely return on or after September 11, 1992, and before January 20, 1993, in order to make such an election, should file a timely incomplete or skeleton return for this purpose, and then file an amended return on or before January 20, 1993, and pay any remaining tax due with the amended return. Again, no late filing penalty will be imposed. No late payment penalty will be imposed with respect to those amended returns accompanied by payment of the unpaid reported tax due if that unpaid amount is 10 percent or less of the total tax liability shown on the amended return.

5. FRANCHISE TAX

Franchise taxpayers having an installment payment due September 21, 1992, October 20, 1992, November 20, 1992, or December 21, 1992, and who, as a result of the disaster, cannot meet the required payment date, may make the payment by January 20, 1993, without incurring any penalties. Interest will be due on the amount of the payment from the original payment due date.

Fiscal year franchise taxpayers whose returns will be due September 21, 1992, October 20, 1992, November 20, 1992, or December 21, 1992, and who, as a result of the disaster cannot meet these due dates, may file their returns and pay the tax due by January 20, 1993, without incurring any penalties. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment. For fiscal year taxpayers who still cannot file by January 20, 1993, the Department will consider as timely any application for automatic extension of time to file that is postmarked on or before January 20, 1993. Payment of the tax estimated to be due must accompany the application for automatic extension.

The maximum extension for filing a Hawaii tax return that may be granted to taxpayers is 6 months. For taxpayers whose franchise tax returns were due March 20, 1992, April 20, 1992, May 20, 1992, or June 20, 1992, and who received extensions of time to file totalling 6 months cannot be granted any further extension of time for filing beyond September 21, 1992, October 20, 1992, November 20, 1992, or December 21, 1992, respectively. Those taxpayers who, as a result of the disaster, will be unable to file by their respective extended filing dates, will be deemed to have reasonable cause for the late filing. No late filing penalty will be imposed for returns marked "Hurricane Iniki" that are postmarked on or before January 20, 1993. No penalty for late payment will be imposed with respect to those returns accompanied by payment of the unpaid reported tax due if that unpaid amount is 10 percent or less of the total tax liability shown on the return. Abatement of penalties on returns filed after January 20, 1993, (for which no further extension is permitted) will be considered on a case-by-case basis. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment. For fiscal year taxpayers, any automatic 6 month extension will be applied from the original due date of the return. Thus, the extended due date for returns due on September 21, 1992, is March 22, 1993; for returns due on October 20, 1992, the extended due date is April 20, 1993; for returns due on November 20, 1992, the extended due date is May 20, 1993, and for returns due on December 21, 1992, the extended due date is June 21, 1993.

6. PUBLIC SERVICE COMPANY TAX

Public service company taxpayers having installment payments due September 21, 1992, and December 21, 1992, and who, as a result of the disaster, cannot meet the required payment date, may make the payment by January 20, 1993, without incurring any penalties. Interest will be due on the amount of the payment from the original payment due date.

7. RETURNS OF GENERAL EXCISE AND USE, TRANSIENT ACCOMMODATIONS, AND RENTAL MOTOR VEHICLE AND TOUR VEHICLE SURCHARGE TAXES

Taxpayers whose returns of Hawaii general excise and use, transient accommodations, and/or rental motor vehicle and tour vehicle surcharge taxes are due September 30, 1992, November 2, 1992, November 30, 1992, or December 31, 1992, and who, as a result of the disaster cannot meet these due dates, may file their returns and pay the tax due by January 31, 1993, without incurring any late filing penalties. Interest will be due on any unpaid taxes from the original due date of the return to the date of payment. No late filing penalty will be imposed for returns that are postmarked on or before January 31, 1993.

Businesses with operations throughout the State including areas affected by Hurricane Iniki should file their returns on time if they are able to do so, even if complete information from locations affected by the Hurricane Iniki is not available by the due date of the returns. Amended returns should be filed once the missing information is obtained.

8. PRESIDENTIAL PROCLAMATION

President Bush has declared the State of Hawaii a natural disaster area. As a result of this proclamation, Hawaii taxpayers suffering property losses as a result of Hurricane Iniki may elect to take the deductible casualty losses incurred as a result of the storm on their 1991 income tax returns. Amended returns may be filed for 1991 to make this election.

9. FOR MORE INFORMATION

If you have questions or need more information, contact your nearest District Office. On Oahu call 587-4242, on Kauai call 241-3456, other neighbor islands call 1-800-222-3229.
 
 

/s/
RICHARD F. KAHLE, JR.
Director of Taxation