§235-55  Tax credits for resident taxpayers. (a)  Whenever an individual or person liable to the taxes imposed uponindividuals, who is a resident of the State or who has filed a joint residentreturn under section 235-93, has become liable for income taxes to a state, orto the District of Columbia, Puerto Rico, or any other territory or possessionof the United States, or to a foreign country upon any part of the individual'sor person's taxable income for the taxable year, derived or received from sourceswithout the State and taxed under the laws of such other jurisdictionirrespective of the residence or domicile of the recipient, there shall becredited against the tax payable by the individual or person under this chapterthe tax so paid by the individual or person to the other jurisdiction upon theindividual's or person's producing for the department of taxation satisfactoryevidence:

(1)  Of such tax payment; and

(2)  That the laws of the other jurisdiction do notallow the individual or person a credit against the taxes imposed by suchjurisdiction for the taxes paid or payable under this chapter, or do allow suchcredit in an amount which has been deducted in computing the amount of creditsought under this section.

(b)  The application of such credit, however:

(1)  Shall not be allowed with respect to any taxableincome or any tax which under subchapter N of chapter 1 of the Internal RevenueCode of 1954 (which is applicable for federal purposes but not for statepurposes) is or may be the subject of an exclusion, exemption, or tax credit;and

(2)  Shall not operate to reduce the tax payable underthis chapter to an amount less than that which would have been payable had thetaxpayer been taxable only on the income from property owned, personal servicesperformed, trade or business carried on, and other sources in the State.

(c)  If any taxes paid to another jurisdictionfor which a taxpayer has been allowed a credit under this section are at anytime credited or refunded to the taxpayer, such fact shall be reported by thetaxpayer to the department within twenty days after the credit or refund. Failure to make such report shall be deemed failure to make a return andsubject to the penalties imposed by law in such cases.  A tax equal to the creditallowed for the taxes so credited or refunded shall be due and payable from thetaxpayer upon notice and demand from the department.  If the amount of such taxis not paid within ten days from the date of the notice and demand, thetaxpayer shall be subject to the usual penalties and interest for delinquencyin payment.

(d)  Nothing in this section shall be construedto permit a credit against the taxes imposed by this chapter on account offederal income taxes. [L Sp 1957, c 1, pt of §2; am L 1959, c 277, §9(a); am LSp 1959 2d, c 1, §16; Supp, §121-12; HRS §235-55; gen ch 1985; am L 1996, c187, §5]