Hawaii: Sales Tax Handbook
How to appeal a sales tax audit or penalty in Hawaii
In Hawaii, the Department of Taxation will frequently audit business sales tax returns and may issue penalties or punishments for tardy filing, incorrect reporting, willful omissions, or other violations. Penalties can range from fines to revocation of your sales tax permit depending on the infraction.
If you disagree with a penalty or ruling made by the Hawaii Department of Taxation, you have several options you can pursue in appealing their decision. This page contains basic guidelines for appealing to the Department of Taxation, to an administrative appeal body, and through the courts.
Sales Tax Statute of Limitations in Hawaii
In sales tax law, the "statute of limitations" is the maximum amount of time state authorities have to investigate and begin potential audit or prosecution related to a a filed Hawaii sales tax return in the event of underpayment, incorrect reportings, etc. The Department of Taxation cannot begin an audit or issue a penalty after this timeframe.
The statute of limitations in Hawaii is three years from the later of either the filing date or the annual return due date.
Appealing to the Department of Taxation in Hawaii
If you do not agree with a penalty or decision made by the Hawaii Department of Taxation, you have the right to file an appeal and ask for reconsideration. In the case of a department appeal, an official petition under expedited appeals and dispute resolution program must be completed after the issuance of notice of proposed assessment.Top
Administrative Sales Tax Appeals in Hawaii
In the case of administrative appeal, an official petition must be filed with State Board of Tax Appeals within thirty days after date in which the receipt of the decision must be filed with District Board of Review(within thirty days after mailing date of notice of assessment)Top
Judicial Sales Tax Appeals in Hawaii
If all other appeal avenues fail, businesses can make a final appeal in the state court system. When working with judicial appeals, the suit must be filed with the Tax Appeal Court within thirty days of mailing the date of assessment for direct review
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