HRS § 231-39 — Additions to taxes for noncompliance or evasion; interest on underpayments and overpayments


§231-39 Additions to taxes for
noncompliance or evasion; interest on underpayments and overpayments. (a)
Except as otherwise provided, this section shall apply to every tax or revenue
law of the State that provides for the filing with the director of taxation of
a return or statement of the tax or the amount taxable.
(b) There shall be added to and become a part
of the tax imposed by such tax or revenue law, and collected as such:
(1) Failure to file tax return. In case of failure
to file any tax return required to be filed on the date prescribed therefor
(determined with regard to any extension of time for filing), unless it is
shown that the failure is due to reasonable cause and not due to neglect, there
shall be added to the amount required to be shown as tax on the return five per
cent of the amount of the tax if the failure is for not more than one month,
with an additional five per cent for each additional month or fraction thereof
during which the failure continues, not exceeding twenty-five per cent in the
aggregate. For purposes of this paragraph, the amount of tax required to be
shown on the return shall be reduced by the amount of any part of the tax which
is paid on or before the date prescribed for payment of the tax and by the
amount of any credit against the tax which may be claimed upon the return.
This paragraph shall not apply to any failure to file a declaration of
estimated tax required by section 235-97.
(2) Failure to pay tax.
(A) If any part of any underpayment is due to
negligence or intentional disregard of rules (but without intent to defraud),
there shall be added to the tax an amount up to twenty-five per cent of the
underpayment as determined by the director.
(B) If any part of any underpayment of tax
required to be shown on a return is due to fraud, there shall be added to the
tax an amount up to fifty per cent of the underpayment as determined by the
director.
(C) If any penalty is assessed under
subparagraph (B) (relating to fraud) for an underpayment of tax which is
required to be shown on a return, no penalty under paragraph (1) (relating to
failure to file the return) shall be assessed with respect to the same
underpayment.
(3) Failure to pay tax after filing timely returns.
If a return is filed on or before the date prescribed therefor and the amount
shown as tax on the return is not completely paid within sixty days of the
prescribed filing date, there shall be added to the unpaid tax an amount up to
twenty per cent as determined by the director.
(4) Interest on underpayment or nonpayment of tax.
(A) If any amount of tax is not paid on or
before the last date prescribed for payment, interest on such amount at the
rate of two-thirds of one per cent a month or fraction of a month shall be paid
for the period beginning with the first calendar day after the date prescribed
for payment, section 231-21 to the contrary notwithstanding, to the date paid.
(B) If the amount of any tax is reduced by
reason of a carryback of a net operating loss allowed under chapter 235, such
reduction in tax shall not affect the computation of interest under this
paragraph for the period ending with the last day of the taxable year in which
the net operating loss arises.
(C) Interest prescribed under this paragraph
on any tax shall be paid upon notice and demand, and shall be assessed,
collected, and paid in the same manner as taxes.
(D) No interest under this paragraph shall be
imposed on interest provided by this paragraph.
(E) If any portion of a tax is satisfied by
credit of any overpayment, then no interest shall be imposed under this
paragraph on the portion of the tax so satisfied for any period during which,
if the credit had not been made, interest would have been allowable with
respect to the overpayment.
(F) Interest prescribed under this paragraph
on any tax may be assessed and collected at any time during the period within
which the tax to which the interest relates may be collected.
(G) This paragraph shall not apply to any
failure to pay estimated tax required by section 235-97.
(c) No taxpayer shall be exempt from any
penalty or interest by reason of having contested the tax, but only to the
extent that the tax is adjudged to be excessive or contrary to law.