PART I. GENERAL PROVISIONS

 

§235-1  Definitions.

"Biotechnology" means fundamentalknowledge regarding the function of biological systems from the macro level tothe molecular and subatomic levels that has application to developmentincluding the development of novel products, services, technologies, andsubtechnologies from insights gained from research advances that add to thatbody of fundamental knowledge.

"Blind" means a person whose centralvisual acuity does not exceed 20/200 in the better eye with correcting lenses,or whose visual acuity is greater than 20/200 but is accompanied by alimitation in the field of vision such that the widest diameter of the visualfield subtends an angle no greater than twenty degrees.  The impairment ofsight shall be certified to on forms prescribed by the department of taxationon the basis of a written report on an examination performed by a qualifiedophthalmologist or qualified optometrist.

"Computer data" means anyrepresentation of information, knowledge, facts, concepts, or instructions thatis being prepared or has been prepared and is intended to be processed, isbeing processed, or has been processed in a computer or computer network.

"Computer program" means an orderedset of computer data representing coded instructions or statements, that, whenexecuted by a computer, causes the computer to perform one or more computeroperations.

"Computer software" means computerdata, a computer program, or a set of computer programs, procedures, orassociated documentation concerned with the operation and function of acomputer system, and includes both systems and application programs andsubdivisions, such as assemblers, compilers, routines, generators, and utilityprograms.

"Corporation" means the same as in theInternal Revenue Code.  A "domestic corporation" is one organizedunder the laws of the State.  A "foreign corporation" is any othercorporation.

"Deaf" means a person whose averageloss in the speech frequencies (500-2000 Hertz) in the better ear is eighty-twodecibels, A.S.A., or worse.  The impairment of deafness shall be certified toby a qualified otolaryngologist or a licensed audiologist under chapter 468E onforms prescribed by the department of taxation.

"Dividend" means any distribution bya corporation to its shareholders or holders on an interest therein which istreated as a dividend by the Internal Revenue Code.

"Employee" means the same as in theInternal Revenue Code.

"Fiduciary" means the same as in theInternal Revenue Code.

"Fiscal year" means the same as inthe Internal Revenue Code.

"Gross income", "adjusted grossincome", "ordinary income", "ordinary loss", and"taxable income" respectively mean the same as gross income, adjustedgross income, ordinary income, ordinary loss, and taxable income as defined anddetermined under the Internal Revenue Code, except as otherwise provided inthis chapter.

"Head of household" means anyindividual who qualifies as a head of household under the Internal RevenueCode.

"Husband and wife" means the same asin the Internal Revenue Code.

"Income tax law of 1901" means theincome tax law enacted by Act 20 of the Session Laws of 1901 as it read fromtime to time prior to the enactment of the income tax law of 1932.

"Income tax law of 1932" means theincome tax law enacted by Act 44 of the Second Special Session Laws of 1932, asit read from time to time prior to the enactment of the income tax law of 1957.

"Income tax law of 1957" means theincome tax law enacted by the Twenty-Ninth Legislature, as it reads from timeto time.

"Includes" and "including"when used in a definition shall not be deemed to exclude other things otherwisewithin the meaning of the term defined.

"Individual" means a person otherthan a trust, estate, partnership, or corporation, as defined.

"Internal Revenue Code of 1954, asamended" includes the Internal Revenue Code of 1986 and the InternalRevenue Code of 1986, as amended.

"Investment" means a nonrefundableinvestment, at risk, as that term is used in section 465 (with respect todeductions limited to amount at risk) of the Internal Revenue Code, in aqualified high technology business, of cash that is transferred to thequalified high technology business, the transfer of which is in connection witha transaction in exchange for stock, interests in partnerships, joint ventures,or other entities, licenses (exclusive or nonexclusive), rights to usetechnology, marketing rights, warrants, options, or any items similar to thoseincluded in this definition, including but not limited to options or rights toacquire any of the items included in this definition.  The nonrefundableinvestment is entirely at risk of loss where repayment depends upon the successof the qualified high technology business.  If the money invested is to berepaid to the taxpayer, no repayment except for dividends or interest shall bemade for at least one year from the date the investment is made.  The annualamount of any dividend and interest payment to the taxpayer shall not exceedtwelve per cent of the amount of the investment.

"Nonresident" means every individualother than a resident.

"Nonresident estate" or"nonresident trust" means one other than resident.

"Paid or incurred, paid or accrued"means the same as in the Internal Revenue Code.

"Partner" means the same as in theInternal Revenue Code.

"Partnership" means the same as inthe Internal Revenue Code.

"Person" includes an individual, atrust, estate, partnership, association, company, or corporation.

"Person totally disabled" means aperson who is totally and permanently disabled, either physically or mentally,which results in the person's inability to engage in any substantial gainfulbusiness or occupation.

The disability shall be certified to by (1) aphysician or osteopathic physician licensed under chapter 453, (2) a qualifiedout-of-state physician who is currently licensed to practice in the state inwhich the physician resides, or (3) a commissioned medical officer in theUnited States Army, Navy, Marine Corps, or Public Health Service, engaged inthe discharge of one's official duty.  Certification shall be on formsprescribed by the department of taxation.

"Prepaid legal service plan"("Plan") means a group legal service plan in which the cost of theservices are prepaid by the group member or by some other person ororganization in the member's behalf.  A group legal service plan is a plan bywhich legal services are rendered to individual members of a group identifiablein terms of some common interest.  A plan shall provide:

(A) That individual members shall be afforded freedomof choice in the selection of their own attorney or attorneys to provide legalservices under such plan.

(B) For the payment of equal amounts for the cost ofservices rendered without regard to the identity of the attorney or attorneysselected by the plan member or members.  No plan shall otherwise discriminateon the basis of such selection.

"Regulated investment company" meansa corporation which qualifies as such under sections 851 and 852 of theInternal Revenue Code.

"Resident" means (1) every individualdomiciled in the State, and (2) every other individual whether domiciled in theState or not, who resides in the State.  To "reside" in the Statemeans to be in the State for other than a temporary or transitory purpose. Every individual who is in the State more than two hundred days of the taxableyear in the aggregate shall be presumed to be a resident of the State.  Thispresumption may be overcome by evidence satisfactory to the department oftaxation that the individual maintains a permanent place of abode outside ofthe State and is in the State for a temporary or transitory purpose.  No personshall be deemed to have gained or lost a residence simply because of theperson's presence or absence in compliance with military or naval orders of theUnited States, or while engaged in aviation or navigation, or while a studentat any institution of learning.

"Resident estate" means an estate ofa resident decedent the fiduciary of which was appointed by a court of thisState and the administration of which is carried on in this State, and"resident trust" means a trust of which the fiduciary is a residentof the State or the administration of which is carried on in the State.

"Shareholder" means the same as inthe Internal Revenue Code.

"Stock" means the same as in theInternal Revenue Code.

"Taxable year" means the calendaryear or the fiscal year ending during such calendar year upon the basis ofwhich income is computed under this chapter.  "Taxable year"includes, in the case of a return made for a fractional part of a year underthis chapter or under regulations prescribed by the department of taxation, theperiod for which such return is made, and in cases where the departmentterminates the taxable year in accordance with section 231-24 and levies ajeopardy assessment on income for such portion or period of a year undersection 235-109, then the period or portion of the year for which the jeopardyassessment is made.

"Taxpayer" means a person subject toa tax imposed by this chapter.

"Trade or business" includes theperformance of the functions of a public office.

"Uniformed services of the UnitedStates" means the Army, Navy, Air Force, Marine Corps, Coast Guard, Coastand Geodetic Survey, and Public Health Service, and all regular and reservecomponents thereof, including the National Guard.  The term "uniformedservices of the United States" applies only to persons who are deemedmembers thereof under the laws of the United States relating to pay andallowances.  Services as a member of the uniformed services includes inactiveduty training.

"Without regard to source in theState" shall mean income derived or earned from all sources whether fromsources located within or from sources located without the State. [L Sp 1957, c1 pt of §2; am L 1959, c 246, §13 and c 277, pt of §6; am L Sp 1959 2d, c 1,§§16, 19; Supp, §121-1; am L 1967, c 250, §2; HRS §235-1; am L 1968, c 42, §3;am L 1970, c 90, §1; am L 1971, c 97, §1; am L 1973, c 217, §10; am L 1974, c42, §2; am L 1976, c 156, §5 and c 208, §1; am L 1978, c 173, §2(3), (4), and(5); gen ch 1985; am L 1987, c 239, §1(4); am L 1988, c 81, §1; am L 1990, c17, §1; am L 1997, c 178, §1; am L 2000, c 297, §4; am L 2001, c 36, §1; am L 2009,c 11, §27]

 

Note

 

  The L 2009, c 11 amendment is retroactive to April 3, 2008. L 2009, c 11, §76(2).

 

Attorney General Opinions

 

  "Resident" clarified.  Att. Gen. Op. 65-5.

 

Case Notes

 

  Redemption of stock taxable as gain or profit held not dividend 79 F.2d 761.

  "Taxable year".  33 H. 766.

  Abandonment of Hawaiian domicile and acquisition of new.  51H. 339, 461 P.2d 131.