HRS § 231-93 — 231-93


[§231-93] Cash-based business;
defined. For purposes of sections 231-91 to 231-100, "cash-based
business" means any person who operates a business, including for-profit
or not-for-profit, where transactions in goods or services are exchanged
substantially for cash and where the business is found, based upon reasonable
cause including observation or evidence, to have met one of the following
factors:
(1) Is found to have substantially underreported or
misrepresented the proper amount of tax liability on any return or other
submission to the department. For purposes of this paragraph, an amount has
been substantially underreported if the amount properly includible on the
return or submission is in excess of twenty-five per cent of the amount stated
on the return or submission;
(2) Is required to be licensed, registered, or
permitted under title 14 and is in fact not so licensed, registered, or
permitted;
(3) Has a past pattern of noncompliance of
obligations under title 14;
(4) Does not have a fixed and permanent principal
place of business;
(5) Has not obtained any required tax clearance;
(6) Has failed to maintain adequate books and
records, or those records required to be maintained by law or administrative
rule;
(7) Does not accept checks or electronic payment
devices for business transactions; provided that a business may establish
reasonable criteria for accepting personal checks;
(8) Offers price differentials or otherwise deviates
from usual business practices when the business transaction substantially
involves payment of cash, except where there is a bona fide business reason for
a price differential, such as the avoidance of merchant fees imposed by credit
card companies; or
(9) Any other factor relevant to describing a cash-based
business capable of noncompliance as determined by the director of taxation and
issued pursuant to a tax information release;
provided that a business shall not be deemed to have
met any of these factors while a genuine dispute as to that factor is pending
in a contested case before any administrative agency or in any court.