Question: My neighbor considers himself a resident of New Hampshire and pays no state income tax in Hawaii. He lives here for greater than six months a year. Is this legal? Is there an anonymous hotline to report this? We all need folks to pay their taxes.
Answer: Whether or not your neighbor owes Hawaii income tax depends on more than how long he’s here each year. Hawaii income tax form N-15 is for nonresidents and part-time residents, but tax liability does not occur in every case. Gary H. Yamashiroya, a spokesperson for the state Department of Taxation, explains:
“A nonresident may not be subject to Hawai‘i income tax if they do not receive income from property owned, services performed, business carried on, or other sources of income in the State. A resident, on the other hand, is subject to Hawai‘i income tax on all income regardless of source, unless there is an exception/exemption in law.
“Whether a taxpayer is a nonresident or resident depends on a person’s intent, as well as length of time in a location. For Hawai‘i income tax law, a ‘resident’ is every individual who either:
“1) is domiciled in the state, meaning their ‘true, fixed, permanent home and principal establishment,’ and the place to which, whenever absent, they have the intention of returning, is in the state; or
“2) ‘resides’ in the state, meaning they are in the state for a purpose that is not temporary or transitory.
“Every individual who is in the state for more than 200 days of a taxable year in the aggregate is presumed to be a ‘resident.’ It is rebuttable if the individual presents satisfactory evidence that they maintain a permanent place of abode outside of the state and that they are in the state for a temporary or transitory purpose. Of course, there are military or student exceptions.”
See Tax Information Release 97-1 for more details on determining residency, 808ne.ws/3Q3kcRY.
As for your second question, yes, you can report a tax cheat anonymously, but strive to be sure there’s fraud before you do so. Filing a complaint based on mere suspicion risks sending DOTAX on a wild goose chase and is unfair to someone unjustly accused.
To file a complaint about a person or entity falsely filing or not filing personal income taxes, omitting income or exaggerating expenses, illegally operating a rental property or committing some other state tax offense, contact the DOTAX Special Enforcement Section by any of the following methods:
>> Via the online form at tax.hawaii.gov/geninfo/sescontact.
>> By phone at 808-587-1456; leave a detailed voicemail.
>> By email to Tax.Special.Enforcement.Section@ hawaii.gov.
>> By fax to 808-587-1633.
>> By U.S. mail to Special Enforcement Section, Room 228, Department of Taxation, P.O. Box 259, Honolulu, HI 96809-0259.
Provide details about the suspected fraud. Giving your name and contact information is helpful but not required, according to the DOTAX website.
Getting back to your neighbor, New Hampshire does not levy income tax on a person’s W-2 wages, but does tax interest and dividend income. The I&D tax is 4% but is being phased down on an annual basis and will be repealed altogether beginning Dec. 31, 2026, according to New Hampshire’s Department of Revenue Administration.
Mahalo
On Sept. 22 I was parked at Foodland on Dillingham Boulevard, and when I was loading my car, the wind blew my door closed and it was locked. My purse and phone were inside, and I couldn’t think straight on how to handle the problem quickly. Two angels of kindness were in the car next to mine. Piilani and her friend (sorry I didn’t get her name) both offered me the use of their phones so I could contact my husband, who was waiting for me to pick him up, and also suggested I call AAA. They waited until I was settled on a bench to wait before they left. Both of them were so incredibly helpful, kind and generous in spirit. Without their help I would have been really stuck. Mahalo to them both. I will surely pay it forward. — Very grateful gal
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.
