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Kamaaina department store chain Liberty House disappeared nearly 20 years ago. But its Hawaii tax license never did, and along with many other bygone businesses, this has cluttered up state records.
On Monday the state Department of Taxation said it will revoke more than 400,000 “abandoned” tax licenses where licensees have not filed returns for seven years.
The purge, department officials said, will be made after Sept. 30 unless a license holder acts before then by filing past returns or submitting a petition letter to the state tax director explaining why their license shouldn’t be revoked.
Under Hawaii law a state tax license is considered abandoned if no returns have been filed for five years. But the department hasn’t been routinely terminating abandoned licenses, and instead left them to live on in dormancy for decades.
An additional two years and a public notice are being provided before the department revokes abandoned licenses.
“Revoking these abandoned licenses is a housekeeping activity that will improve efficiency in tax administration and allow us to focus our efforts on active businesses,” Linda Chu Takayama, state tax director, said in a statement. “Many businesses close and stop filing tax returns but forget to notify the department to close their tax licenses.”
Anyone curious about the status of a Hawaii tax license may search online at tax.hawaii.gov.
After the planned purge, the department intends to revoke abandoned licenses at least annually.
The department added that obligations to pay taxes remain regardless of whether a license is revoked due to abandonment or is otherwise terminated.