HRS § 235-55 — Tax credits for resident taxpayers


§235-55 Tax credits for resident taxpayers.
(a) Whenever an individual or person liable to the taxes imposed upon
individuals, who is a resident of the State or who has filed a joint resident
return under section 235-93, has become liable for income taxes to a state, or
to the District of Columbia, Puerto Rico, or any other territory or possession
of the United States, or to a foreign country upon any part of the individual's
or person's taxable income for the taxable year, derived or received from
sources without the State and taxed under the laws of such other jurisdiction
irrespective of the residence or domicile of the recipient, there shall be
credited against the tax payable by the individual or person under this chapter
the tax so paid by the individual or person to the other jurisdiction upon the
individual's or person's producing for the department of taxation satisfactory
evidence:
(1) Of such tax payment; and
(2) That the laws of the other jurisdiction do not
allow the individual or person a credit against the taxes imposed by such
jurisdiction for the taxes paid or payable under this chapter, or do allow such
credit in an amount which has been deducted in computing the amount of credit
sought under this section.
(b) The application of such credit, however:
(1) Shall not be allowed with respect to any taxable
income or any tax which under subchapter N of chapter 1 of the Internal Revenue
Code of 1954 (which is applicable for federal purposes but not for state
purposes) is or may be the subject of an exclusion, exemption, or tax credit;
and
(2) Shall not operate to reduce the tax payable under
this chapter to an amount less than that which would have been payable had the
taxpayer been taxable only on the income from property owned, personal services
performed, trade or business carried on, and other sources in the State.
(c) If any taxes paid to another jurisdiction
for which a taxpayer has been allowed a credit under this section are at any
time credited or refunded to the taxpayer, such fact shall be reported by the
taxpayer to the department within twenty days after the credit or refund.
Failure to make such report shall be deemed failure to make a return and
subject to the penalties imposed by law in such cases. A tax equal to the
credit allowed for the taxes so credited or refunded shall be due and payable
from the taxpayer upon notice and demand from the department. If the amount of
such tax is not paid within ten days from the date of the notice and demand,
the taxpayer shall be subject to the usual penalties and interest for
delinquency in payment.
(d) Nothing in this section shall be construed
to permit a credit against the taxes imposed by this chapter on account of
federal income taxes.