HAR § 18-231-9.9-09 — Due date for EFT payment; reasonable cause for untimely payment

(a) Taxpayers participating in the EFT program must initiate the transfer so that the amount due is deposited to the state treasury on or before the due date under the appropriate tax law. If the due date prescribed under the tax law falls on a Saturday, Sunday, or Hawaii state holiday, the payment shall be due on the next day that is not a Saturday, Sunday, or Hawaii state holiday. The occurrence of a federal holiday that is not a Hawaii state holiday, or a holiday observed by the state in which the taxpayer’s financial institution is located, shall not be considered reasonable cause for untimely payment. Example 1: X, a taxpayer participating in the EFT program for withholding taxes, is required to remit a payment of withholding taxes on or before May 10, 1997. X authorizes the EFT before the end of the call-in period on May 9, 1997. May 10, 1997 is a Saturday, so the transfer of funds is made on Monday, May 12, 1997. Because the payment is due on Monday, May 12, 1997, the EFT payment is timely. Example 2: X, a taxpayer participating in the EFT program for withholding taxes, is required to remit a payment of withholding taxes on or before November 10, 1997. X authorizes the EFT before the end of the call-in period on November 10, 1997, because November 9, 1997, is a Sunday. The transfer of funds is made on Tuesday, November 11, 1997. Because the payment is due on Monday, November 10, 1997, the EFT payment is late. Example 3: X, a taxpayer participating in the EFT program for withholding taxes, is required to remit a payment of withholding taxes on or before June 10, 1997. X authorizes the EFT before the end of the call-in period on June 9, 1997, a Monday. However, X’s financial institution is closed on June 9, 1997, because it is a holiday in the state in which that financial institution is located. Furthermore, June 11, 1997, is Kamehameha Day, a legal holiday observed in Hawaii. As a result, the transfer of funds is not made until Thursday, June 12, 1997. Because the payment is due on Tuesday, June 10, 1997, the EFT payment is late. (b) The following shall be considered reasonable cause for failure to make a timely EFT payment: (1) The inability to access the EFT system on the required date because of a system failure beyond the reasonable control of the taxpayer; (2) The failure of the EFT system to properly apply a payment; (3) The failure of the EFT system to issue proper verification of receipt of payment information; or (4) The failure to make a timely payment was caused by an error made by the Data Collection Center, the state treasury, or the department. (c) During the first six-month period a taxpayer is required to remit tax by EFT, the department may waive otherwise applicable penalties if the taxpayer demonstrates that: (1) A good faith effort to comply was made; (2) Circumstances beyond the taxpayer’s reasonable control prevented compliance by the required date; or (3) A mistake or inadvertence prevented timely payment when the taxpayer attempted to correctly and timely initiate an EFT transaction. In determining whether to grant a waiver of penalties under this subsection, the department may consider the taxpayer’s payment history, experience with EFT payments in this and other jurisdictions, and the taxpayer’s prior compliance with these rules.