Hawaii Administrative Rules Title 18 — Department of Taxation

HAR § 18-235-38-05

Apportionment method considered method of accounting

Official textfiles.hawaii.gov13 subsections

# (a)

A taxpayer’s change in any of the following shall be a change in the taxpayer’s method of accounting within the meaning of sections 446 (with respect to methods of accounting) and 481 (with respect to adjustments required by changes in method of accounting), IRC, as operative under chapter 235, HRS:

# (1)

The manner of prorating any item of deduction among the classes of income to which it is applicable. See section 18-235-21-04.

# (2)

The manner in which income is classified as business income or nonbusiness income. See section 18-235-22-05.

# (3)

The manner of valuing property, or of excluding or including property in the property factor. See section 18-235-30-03.

# (4)

The treatment of compensation paid. See section 18-235-33-01.

# (5)

The manner of excluding or including gross receipts in the sales factor. See section 18-235- 35-01.

# (6)

The apportionment formula employed. See section 18-235-38-01.

# (7)

Whether the taxpayer is employing a combined reporting method. See section 18-235-22-03.

# (b)

In order to secure the department’s consent to a change in any of the items set forth in subsection (a), the taxpayer shall file a written application with the department within one-hundred-eighty days after the beginning of the taxable year in which it is desired to make the change.

# (1)

The taxpayer, to the extent applicable, shall (A) disclose in detail all classes of items which would be treated differently as a result of the proposed change, (B) state the reasons for making the change, and (C) furnish the taxpayer’s computation of any applicable adjustments to take into account any duplications or omissions.

# (2)

The department may require such other information as may be necessary in order to determine whether the proposed change will be permitted.

# (3)

Permission shall not be granted unless the taxpayer and the department agree to the terms, conditions, and adjustments, if any, under which the change will be effected.

# (4)

Within one-hundred-eighty days after receiving the application, the department shall grant or deny the application.

Last amended: [Eff 11/25/94] (Auth: HRS §§231-3(9), 235-118) (Imp: HRS §235-38, IRC §§446, 481)

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