Hawaii – Proposed Rules for Cash Economy Enforcement Program

1/17/2013

SALT Report 2047 – The Hawaii Department of Taxation issued a tax information release to provide notice of proposed administrative rules relating to the state’s Cash Economy Enforcement program.  The state enacted temporary program rules in 2011 to enforce the state’s tax compliance and collections laws.

The temporary rules that are currently in effect will expire on January 21, 2013, and a new version of the Cash Economy Enforcement rules will begin on January 22, 2013. The proposed administrative rules detailed in the release are the version that will be submitted to the governor for approval and formal adoption. The proposed rules include the following changes and amendments:

§18-231-94-01T – Fine for failure to produce license

(a)  A person required to be licensed or permitted under title 14 (whether or not so licensed or permitted) and who fails to produce the license or permit upon demand by the special enforcement section shall be fined as follows:

(1) For a first offense, a fine of $250, provided that if the person had not previously been contacted by the special enforcement section, no fine shall be imposed,

(2) For second and subsequent offenses, a fine of $500; provided that if the person is a cash-based business, the fine shall be $1,000.

§18-231-95-01T – Fine for failure to keep adequate books and records

(a)  A person required to keep adequate books and records but who fails to produce such books and records upon demand by the special enforcement section shall be fined as follows:

(1) For the first offense, a fine of $500, provided that if the person had not previously been contacted by the special enforcement section, no fine shall be imposed;

(2) For second and subsequent offenses, a fine of $1,000; provided that if the person is a cash-based business, the fine shall be $2,000.

The Release also discusses:

  • Issuance of a cease and desist citation,
  • Fines for failure to record transaction,
  • Requests for books and records,
  • Fines for tax avoidance price fixing, and
  • Fines for interference with a tax official

For Further Information:

Hawaii Department of Taxation – Tax Information Release No. 2013-01