July 1, 1997


RE: Adoption of Hawaii Administrative Rules (HAR) Relating to Cost Recovery Fees for Selected Goods and Services Provided by the Department of Taxation
Beginning July 1, 1997, the Department of Taxation ("Department") will begin implementing the new cost recovery fee rules which became effective on March 3, 1997. Under Act 131, Session Laws of Hawaii 1996, the Department is authorized to charge cost recovery fees for educational seminars and materials; research and reference materials; and reissuances of refund checks. Act 250, Session Laws of Hawaii 1996, mandates that the Department charge fees for certain tax reports prepared by our Tax Research & Planning Office. The rules (sections 18-231-3.4-01 and 18-231-25.5-01 to -05, HAR) indicate either the fee amounts or methodology by which fee amounts shall be calculated.

Fees for specified goods and services include:

Goods and Services

Fee Amount

Educational Materials and Seminars Actual Cost
Published Tax Reports on Hawaii Income Patterns for Individuals, Corporations, and Proprietorships or Tax Credits Actual Cost
Reissuance of Refund Checks $14.00
Research and Reference Materials Actual Cost (25 cents per sheet of paper)
Tax Information in CD-ROM Format  Actual Cost 

Under previous rules (section 18-231-25.6-02, renumbered section 18-231-25.5-02, HAR), costs for the following were established:

Collection Action

Fee Amount

Processing a Delinquent Account  $50.00
Handling a Foreclosure Action  $50.00, plus any other costs
Garnishment, Levy, or Other Seizures of Wages, Property, or Rights to Property $15.00, plus any other costs incurred
Collection Actions Requiring the Services of Collection Agencies or Attorneys Reasonable fees charged by agencies or attorneys
Recordation of Tax Lien or Release of Tax Lien $25.00, plus any other costs incurred 
Service of a Subpoena in Connection of Collection Effort $25.00, plus any other fees incurred

In the case of cost recovery fees for collection actions only, written notice will be mailed to the taxpayer warning that continued failure to pay the delinquent tax due may result in a collection action for which a cost recovery fee may be charged. The notice will contain a deadline date no less than 10 calendar days after the date of mailing. The Department will not undertake a collection action or charge a collection action fee before that deadline date, unless the Department determines that the collection of tax is in jeopardy (as defined in section 231-24(a), HRS).

All payment checks for cost recovery fees must be made payable to the Director of Finance (rather than the State Tax Collector). However, payment checks for the recordation or release of tax lien fees should be made payable to the Bureau of Conveyances.

To request a copy of the rules, please call the Department of Taxation, Forms Request Line at (808)587-7572 and select the "mail" option. You will be asked to leave your name, address, and the type of document you need (i.e., cost recovery fee rules). Other tax information may also be found on our website at the following address: http//www.hawaii.gov/tax/tax.html.

Director of Taxation