HRS § 235-97 - Estimates; tax payments; returns

(a) (1) Individuals, corporations (including S corporations), estates, and trusts, shall annually furnish the department of taxation with a declaration of estimated tax for the current taxable year. Declarations of estimated tax, except as otherwise provided by rule, shall be governed by the provisions as to returns contained in sections 235-94, 235-98, 235-99, and 235-128. The declarations shall be made on estimated tax payment voucher forms. The payment voucher shall be filed, in the case of taxpayers on the calendar year basis, on or before April 20. In the case of a husband and wife who are entitled to submit a joint payment voucher for federal purposes, a single payment voucher may be submitted by them jointly, in which case the liability with respect to the estimated tax shall be joint and several; if a joint payment voucher is submitted but a joint income tax return is not made for the taxable year, the estimated tax for the year may be treated as the estimated tax of either the husband or the wife or may be divided between them. (2) Each taxpayer shall transmit, with the payment voucher, payment of one-quarter of the estimated tax for the current taxable year. In determining this quarterly payment and all other installments, there first shall be deducted from the total estimated tax the amount of estimated tax withholding or collection at source for the taxable year. Thereafter, on the twentieth day of June and September, the taxpayer shall transmit with the payment voucher, payment of one-quarter of the estimated tax. The fourth quarter payment of the estimated tax shall be transmitted with the payment voucher by January 20 of the year following the taxable year for which the estimate was made. (3) Taxpayers operating on a fiscal year basis shall make similar estimates and tax payments, on or before the twentieth day of the fourth month of the fiscal year and periodically thereafter so as to conform to the payments and returns required in the case of those on a calendar year basis. (4) The department by rule may excuse individuals from filing an estimate in those cases where the gross income and exemptions are such that no tax is expected to accrue under this chapter, or are such that substantially all the tax will be collected through tax withholding or at the source. (5) In the case of a foreign corporation, the department may excuse the filing of an estimate and the payment of estimated tax if it is satisfied that less than fifteen per cent of the corporation's business for the taxable year will be attributable to the State. For the purposes of this paragraph, fifteen per cent of a corporation's business shall be deemed attributable to the State if fifteen per cent or more of the entire gross income of the corporation (which for the purposes of this paragraph means gross income computed without regard to source in the State) is attributable to the State under sections 235-21 to 235-39 or other provisions of this chapter. (6) In the case of a taxpayer whose tax liability is less than $500, the filing of an estimate and the payment of estimated tax shall not be required. (b) Net income returns for the taxable year shall be filed with the department on or before the twentieth day of the fourth month following the close of the taxable year, and shall be accompanied by payment of the balance of the tax for the taxable year, or the entire tax for the taxable year, as the case may be. These returns shall be filed both by persons required to make declarations of estimated tax pursuant to this section and by persons not required to make declarations of estimated tax. (c) At the election of the taxpayer, any installment of the estimated tax may be paid prior to the date prescribed for its payment. (d) A person who, under the regulations of the department adopted pursuant to subsection (a)(4), is relieved of filing an estimate, shall if the regulations cease to apply by reason of a change of circumstances during the taxable year, file the required estimate on the first quarterly payment date prescribed for payment of estimated taxes, following such change of circumstances, and pay the estimated tax in equal installments computed by allocating the entire amount shown by the estimate for the current taxable year to the remaining quarterly payment dates. (e) An amendment of an estimate may be filed, under regulations prescribed by the department. If an amendment is filed, the remaining installments, if any, shall be ratably increased or decreased to reflect the increase or decrease in the estimate. The amended estimate may be accompanied by payment of the amount of underpayment, if any, and if so this shall be considered in determining the period of the underpayment as provided in subsection (g). (f) In the case of any underpayment of estimated tax, except as provided by this subsection, there shall be added to the tax for the taxable year an amount determined at the rate of two-thirds of one per cent a month or fraction of a month upon the amount of the underpayment for the period of the underpayment. (1) The amount of the underpayment shall be the excess of: (A) The required installment, over (B) The amount, if any, of the installment paid on or before the due date for the installment. (2) The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier: (A) The twentieth day of the fourth month following the close of the taxable year, or (B) With respect to any portion of the underpayment, the date on which the portion is paid. For purposes of this paragraph, a payment of estimated tax on any installment date shall be credited against unpaid required installments in the order in which the installments are required to be paid. (3) For the purposes of this section, the term "tax" means the tax imposed under this chapter reduced by any credits available to the taxpayer other than the credit for amounts withheld from the taxpayer's wages or taxes withheld at the source, if any, or estimated tax payments or payments remitted with extension requests for the taxable year. (4) Sections 6654(d), (e)(2), (e)(3), (h), (i), (j), (k), and (l), (with respect to failure by an individual to pay estimated income tax), and 6655(d), (e), (g)(2), (g)(3), (g)(4), and (i) (with respect to failure by a corporation to pay estimated income tax) of the Internal Revenue Code, as of the date set forth in section 235-2.3(a), shall be operative for the purposes of this section; provided that the due dates contained in any of the preceding Internal Revenue Code sections shall be deemed to be the twentieth day of the applicable month; and provided further that, for purposes of this chapter in applying section 6654(d), the required annual payment shall be the lesser of sixty per cent of the tax shown on the return for the taxable year (or, if no return is filed, sixty per cent of the tax for the taxable year) or one hundred per cent of the tax shown on the return of the individual for the preceding taxable year. (g) The amounts of taxes withheld from wages or collected at source shall be deemed payments of estimated tax, and an equal part of any such amount shall be deemed paid on each installment date for the taxable year, unless the taxpayer establishes the dates on which all amounts were actually withheld or collected, in which case the amounts so withheld or collected shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld or collected. [L Sp 1957, c 1, pt of §2; am L 1959, c 277, §12; am L Sp 1959 2d, c 1, §16; Supp, §121-31; am L 1967, c 134, §4; HRS ; am L 1979, c 62, §2(12); gen ch 1985; am L 1990, c 16, §3; am L 1991, c 20, §1; am L 1993, c 73, §§5, 6; am L 1995, c 67, §1; am L 1998, c 113, §4; am L 2002, c 190, §1; am L 2003, c 14, §1] Note The 2003 amendment applies to taxable years beginning after December 31, 2002. L 2003, c 14, §4. Revision Note In subsection (d), "(a)(4)" substituted for "(a)(5)".