Movers & Shakas, RT air, Work Remotely In Hawaii

[eightfingers2.0]

This was posted on People.com.

Looks like they’re serious about getting the word out!  

[kalakoa]

https://www.staradvertiser.com/2020/12/1...-tax-time/

That section on state income taxes says that “in the case of a nonresident, the tax applies to the income received or derived from property owned, personal services performed, trade, or business carried on, and any and every other source in the State. In the case of a nonresident spouse filing a joint return with a resident spouse, the tax applies to the entire income of the nonresident spouse computed without regard to source in the state.”

[leilanidude]

Ouch. That should remove any incentive to even temporarily work remote in Hawaii.

[kalakoa]

Just don't tell anyone ("commit tax fraud by evasion") and you'll be fine.

[leilanidude]

Just don't tell anyone ("commit tax fraud by evasion") and you'll be fine.

Problem would be that if you participated in the program - they already know you should then be paying the income tax.

[SSGSurf]

Direct from instructions on form N-15

"Nonresident
A Hawaii nonresident is an individual who is in Hawaii for a temporary or transient purpose, and whose permanent domicile is not Hawaii.
A nonresident must file an Individual Income Tax Return—Nonresident and Part-Year Resident (Form N-15), if required to do so. A nonresident will be taxed on income from Hawaii sources only."

Be aware that "Hawaii sources only" or "source in the State" means doing business tied directly within the State.  This does not mean that you are transient or non-resident status and you happen to be in Hawaii while conducting business that is completely outside of Hawaii.


Understand resident status and nexus.  Much better ways to make Hawaii more attractive for businesses than this.

[leilanidude]

State defines transient and non-transient rentals and has different tx rates for the landlord. Six months or longer is non-transient, so if you come over for 6 months, you need to pay Hawaii state income tax?

[SSGSurf]

Most of the online resources will talk about property rentals.  Anything real property owned in Hawaii by anyone no matter your location is taxable in State. 

I am involved in three businesses;
One is based and registered in Hawaii as primary.  Doing business in and out of state.
Second is based out of Delaware but we do business in Hawaii with Hawaii customers and are Vendor compliant for State and City contracts.  This business is registered as a foreign entity with the State of Hawaii, DCCA, etc.
The third is based out of Delaware, does no business within the State of Hawaii.

Non-resident, part-time resident, and resident are defined in tax form N15.  As explained by my tax lawyers if I am summarizing correctly is that if you do not take steps towards residency in Hawaii (buying or long term leasing residence/office), you maintain a primary residence outside of Hawaii, pay primary taxes in your home state, you are not permanently in Hawaii beyond a 200-day time frame, and all business is outside of Hawaii (no in State clients, related in any manner), then you are a non-resident or transient status.

In other words, if business three above has employees vacationing in Hawaii but doing all business outside of the State then they are not liable for Hawaii taxes.

Now if a business owner/employee lives in Hawaii (full-time resident), but conducts all business outside of Hawaii, you must still pay taxes.  You may however file for exemptions if you are showing paying taxes out-of-state so you don't pay double taxes. 

There are nexus rules that can put you in or out of these non-resident statuses.  So the initial program mentioned in the OP may or may not fall in certain categories for taxes.  The intent of the program looks to induce people to establish residency in Hawaii even if they don't do business here, so they can then be taxed as a resident.  It might also encourage them to conduct direct business within the State leading to GE taxes.

If I were interested in relocating to Hawaii to live and do business outside of the State as a trial, I would pay my own airfare and vacation rental on a trial basis to avoid any possible tax issues. 

There are better models to incentivize businesses/people to relocate, but Hawaii is NOT very akamai with that.

[terracore]

Luring people here for vacations is fine but it doesn't keep the ponzi scheme going.

[HereOnThePrimalEdge]

It looks as though the Movers & Shakas program has attracted some interest:

The program’s first cohort of 50 will be coming next month.
“I think of it less of a ‘workcation,” and more like “work from Hawaii” with a real opportunity to contribute to the community,” said the program’s director Nicole Lim.


Other remote workers are making their way to Hawaii on their own:

Hawaii businesses say they are adapting to a crowd of mainlanders who spend weeks in the state on a “workcation.”
Fannie Cline, the principal broker at Realty Group Hawaii, said they are seeing many folks looking for furnished rentals they can stay at for a few months while they work.
“There is a huge demand,” Cline said. “The majority of what we’re seeing is tech individuals who are able to work remotely.

https://www.hawaiinewsnow.com/2021/01/23...-paradise/