HAR § 18-241-3.5-01 — International banking facilities; coordination with apportionment and allocation rules

(a) If a taxpayer is apportioning business income as set forth in sections 18-241-4-01 to 18-241- 4-05, and the taxpayer is claiming a deduction under section 241-3.5, HRS (with respect to deduction for income connected with an international banking facility), the rules in this section shall apply. (b) For purposes of this section: “Applicable expenses” mean the same as in section 241-3.5(3), HRS. “Eligible gross income” means the same as in section 241-3.5(2), HRS. “International banking accounts” mean the same as in section 412:5-206, HRS. (c) The deduction allowed by section 241-3.5, HRS, shall be applied before the allocation and apportionment set forth in section 18-241-4-01. (d) Receipts that are included in eligible gross income shall be excluded from the numerator and denominator of the receipts factor in section 18-241-4-03. (e) International banking accounts shall be excluded from the numerator and denominator of the property factor in section 18-241-4-04. (f) Payroll that is included in applicable expenses shall be excluded from the numerator and denominator of the payroll factor in section 18-241-4-05.