HOUSE OF REPRESENTATIVES

H.B. NO.

1471

THIRTY-SECOND LEGISLATURE, 2023

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to TELEWORK.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Section 235-4, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Nonresidents.

(1) In the case of a nonresident, the tax applies to the income received or derived from property owned, personal services performed, trade, or business carried on, and any and every other source in the State.

In the case of a nonresident spouse filing a joint return with a resident spouse, the tax applies to the entire income of the nonresident spouse computed without regard to source in the State.

(2) In the case of a nonresident who immediately prior to the Hawaii coronavirus disease 2019 state of emergency was an employee engaged in performing services in the State and is currently performing the same services from a location outside of the State due to a pandemic-related circumstance; for taxable years beginning after December 31, 2022, the tax applies to all income received by the nonresident from the services performed outside the State.

As used in this subsection, "Hawaii coronavirus disease 2019 state of emergency" and "pandemic-related circumstances" shall have same meaning as defined in section 235-4.2."

SECTION 2. Section 235-4.2, Hawaii Revised Statutes, is amended to read as follows:

"[[]235-4.2[]] Persons lacking physical presence in the State; nexus presumptions. (a) A person that lacks physical presence in the State is presumed to be systematically and regularly engaging in business in the State and taxable under this chapter if, during the current or preceding calendar year:

(1) The person engages in two hundred or more business transactions with persons within the State; [or]

(2) The sum of the value of the person's gross income attributable to sources in this State equals or exceeds $100,000 or for a person that does business within and without the State the numerator of the person's sales factor for the State equals or exceeds $100,000[.]; or

(3) The person is a nonresident, who:

(A) Immediately prior to the Hawaii coronavirus disease 2019 state of emergency, was an employee engaged in performing services in the State; and

(B) Is performing the same services from a location outside of the State due to a pandemic-related circumstance.

(b) As used in this section:

"Hawaii coronavirus disease 2019 state of emergency" means the state of emergency in the State declared in the governor's proclamation related to the COVID-19 Emergency, signed March 4, 2020.

"Pandemic-related circumstances" means a situation that includes:

(1) A government order issued in response to the coronavirus disease 2019 pandemic;

(2) A remote work policy adopted by an employer in compliance with federal or state government guidance or public health recommendations relating to the coronavirus disease 2019 pandemic;

(3) The worker's compliance with quarantine, isolation directions relating to a SARS-CoV-2 diagnosis or suspected diagnosis, or advice of a physician relating to SARS-CoV-2 exposure; or

(4) Any other work arrangement in which an employee, who performed services at a location in the State prior to the Hawaii coronavirus disease 2019 state of emergency, performs services for the employer from a location outside the State after the Hawaii coronavirus disease 2019 state of emergency."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2022.

 

INTRODUCED BY:

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Report Title:

Income Tax; Nonresident; Telework; Coronavirus Disease 2019 Pandemic

 

Description:

Clarifies that there is a presumption of a nexus for certain nonresident employees who telework. Amends the income tax law to apply to the total income of certain nonresident employees who telework. Applies to taxable years beginning after 12/31/2022.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.