May 14, 1993


RE:   Assignment of the General Excise and Use Tax to the Taxation Districts No Longer a Requirement

Act 5, Session Laws of Hawaii (SLH) 1993, amended section 237-34, Hawaii Revised Statutes, relating to the filing of the general excise/use tax returns. The Legislature found that the reporting of the general excise tax by taxation districts was cumbersome and not easily conformed to by many businesses which conduct transactions in several taxation districts. The problem was further compounded when the business was providing service in more than one taxation district. Act 5 restores the filing requirement which was in place prior to the enactment of Act 184, SLH 1990, effective July 1, 1993.

For your information, the purpose of Act 184, SLH 1990, was to authorize the counties to establish a general excise and use tax surcharge of 1/2 percent for a maximum of 10 years. Since the county surcharge tax was not adopted by the counties, Act 5 restores the original filing requirement to send general excise tax returns to the first taxation district without reporting the general excise tax by district.

With the adoption of Act 5, the requirement to assign the general excise and use taxes to taxation districts by way of filing the “General Excise/Use Tax Report by Districts - Annual Return and Reconciliation” (Schedule C, Form G-49) is void as of July 1, 1993, the effective date of Act 5. This includes the Schedule C found in the present general excise tax booklet. Based on Act 5 and our experience with Schedule C, failure to file a Schedule C with the Department of Taxation before July 1, 1993, will not incur any penalties.

NOTE: Voiding the requirement to assign the tax by way of filing the Schedule C does not change a taxpayer’s general excise/use tax liability.  Additionally, reporting of the general excise tax on Schedule A and the use tax on Schedule B of the periodic (Form G-45) and annual (Form G-49) tax returns is unchanged. Further, the statutory provisions relating to filing dates and to payment requirements for the general excise and use taxes remain the same. A taxpayer who is engaged in business in more than one taxation district shall continue to file the general excise/use tax returns and schedules with, and pay the tax to, the Oahu taxation district on a Statewide basis.

Director of Taxation

HRS Section Explained: Section 237-34(a)

Obsolete and Inapplicable Authoritative References for Schedule C, Form G-49 That Become Due After June 30, 1993: Tax Information Release No. 90-12, dated December 7, 1990, and Hawaii Administrative Rules of March 13, 1991, affecting Rule Sections 18-237-34-01 to 18-237-34-12 as well as Rule Sections 18-238-5-01 and 18-238-5-02.