HAR § 18-235-5-04 — Allocation of income and deductions among taxpayers

(a) If two or more organizations, trades, or businesses, whether or not incorporated or organized in Hawaii, are owned or controlled directly or indirectly by the same interests, the director may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among the organizations, trades, or businesses, if the director determines that the distribution, apportionment, or allocation is necessary in order to clearly reflect the income attributable to any taxpayer’s activity in this State. (b) This section shall not be construed to permit the filing of consolidated returns by two or more affiliated corporations except as provided by section 235-92, HRS. (c) The director shall not allocate or apportion income to Hawaii in excess of what is considered just and reasonable under the circumstances.