HAR § 18-235-1.07 — Establishing residency by residing in the State

(a) An individual who is not domiciled in Hawaii may acquire the status of a resident by virtue of being physically present in Hawaii for other than a temporary or transitory purpose. (b) Whether or not the purpose for which an individual is in Hawaii will be considered temporary or transitory in character will depend upon the facts and circumstances of each particular case. (c) An individual will be deemed a nonresident of Hawaii if he or she is in Hawaii for a temporary or transitory purpose, including the following: (1) The individual is simply passing through Hawaii to another state or country; (2) The individual is in Hawaii for a brief rest or vacation; (3) The individual is in Hawaii for health reasons and is receiving medical treatment or recuperating from an illness; and (4) The individual’s presence in Hawaii is required for a short period to complete a particular transaction or perform a particular contract. (d) An individual will be deemed a resident of Hawaii if they are in Hawaii for other than a temporary or transitory purpose, including the following: (1) The individual is in Hawaii for business purposes which will require a long or indefinite period to accomplish; (2) The individual is employed in a position that may last permanently or indefinitely; and (3) The individual has retired and moved to Hawaii with no definite intention of leaving. (e) If an individual has been in Hawaii more than 200 days of the taxable year in the aggregate (not consecutive), the individual is presumed to have been a resident of Hawaii from the time of the individual’s arrival. The presumption may be overcome if the individual rebuts the presumption with evidence satisfactory to the Department of Taxation that the individual maintains a permanent place of abode outside of Hawaii and is in Hawaii for a temporary or transitory purpose. (f) Since each state’s definition of “resident” may be different, it is possible for an individual to be considered a resident of more than one state. Example 1: G, a civil engineer, is domiciled in New Y ork where G owns a house in which G’s family lives. G votes in New Y ork, maintains a bank account there and returns to his home in New Y ork whenever possible. G is employed by a company as supervising engineer of its projects. In 1995, the company enters into a contract for construction work in Hawaii which will require G to spend 18 months in Hawaii. G comes to Hawaii in 1995 and spends almost the entire year living in a rented apartment. G’s spouse and family remain in New Y ork except for a summer visit to Hawaii. Upon completion of the project, G will return to New Y ork to await another assignment. Conclusion: Since G has been in Hawaii more than 200 days of the taxable year in the aggregate, G is presumed to have been a resident of Hawaii from the time of G’s arrival. G, however, rebuts the presumption under the above circumstances showing that G maintains a permanent place of abode outside Hawaii and is in Hawaii for a temporary or transitory purpose. Accordingly, G is deemed to be a nonresident of Hawaii. Example 2: H, a civil engineer, is domiciled in California. H is employed by a company in California. In 1996, H was transferred to Hawaii with the same company. H did not request the transfer to Hawaii. The transfer was made for the convenience of H’s employer and H was required to work indefinitely in Hawaii or lose H’s position with the company. H’s spouse and children accompanied H to Hawaii. H has always considered California to be H’s permanent home and always intended to return to California. No affirmative steps were taken either to abandon the domicile in California or to establish a permanent domicile in Hawaii. HRS §235-1