SB 1467: Tax Appeals; Service; Director of Taxation

A BILL FOR AN ACT

RELATING TO TAX APPEALS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 232-5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Any protesting taxpayer who would incur a total tax liability, not including penalties and interest, of less than $1,000, by reason of the protested assessment or payment in question, may elect to employ the procedure established by this section upon:

     (1)  Payment per taxpayer of a nonrefundable filing fee set pursuant to rules adopted by the supreme court, which shall not exceed $25; and

     (2)  Filing with the tax appeal court a written statement of the facts in the case, together with a waiver of the right to further appeal.

The tax appeal court shall cause a notice of the appeal and a copy of the statement to be served on the director of taxation [and] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving [a] the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county."

     SECTION 2.  Section 232-16, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  A taxpayer or county may appeal directly to the tax appeal court without appealing to the state taxation board of review or any equivalent administrative body established by county ordinance; provided that a taxpayer appealing a real property tax assessment shall first obtain a decision from an administrative body established by county ordinance, before appealing to the tax appeal court, if county ordinance requires a taxpayer to do so.  An appeal permitted by law to the tax appeal court is properly commenced by filing, on or before the date fixed by law for the taking of the appeal, a written notice of appeal in the office of the tax appeal court and by service of the notice of appeal on the director of taxation [and,] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county.  An appealing taxpayer shall also pay the costs in the amount fixed by section 232-22."

     SECTION 3.  Section 232-17, Hawaii Revised Statutes, is amended to read as follows:

     "§232-17  Appeals from taxation board of review to tax appeal court.  An appeal shall lie to the tax appeal court from the decision of the state taxation board of review, or equivalent administrative body established by county ordinance.  An appeal to the tax appeal court shall be properly commenced by the filing, by the taxpayer, county, or director of taxation, of a written notice of appeal in the office of the tax appeal court within thirty days after the filing of the decision of the state taxation board of review or an equivalent county administrative body, and, in the case of any appealing taxpayer, the payment of the costs of court in the amount fixed by section 232-22, and service of the notice of appeal on the director of taxation [and,] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county.  A notice of appeal shall be sufficient if it states that the taxpayer, county, or director of taxation appeals from the decision of the state taxation board of review, or an equivalent county administrative body, to the tax appeal court and may be amended at any time.  The appeal shall bring up for determination all questions of fact and all questions of law, including constitutional questions involved in the appeal.

     In case of an appeal by the county or director of taxation, a copy of the notice of appeal shall be forthwith delivered or mailed to the taxpayer concerned or to the clerk of the county concerned in the manner provided in section 232-7 for giving notice of decisions.

     An appeal shall be deemed to have been taken in time, and properly commenced, if the notice thereof and costs, if any, and the copy or copies of the notice [shall] have been deposited in the mail, postage prepaid, properly addressed to the tax appeal court, [director of taxation,] taxpayer or taxpayers, and[,] director of taxation or, if relevant, the real property assessment division of the county involved, respectively, within the time period provided by this section."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Tax Appeals; Service; Director of Taxation

Description:

Clarifies that a notice of appeal relating to an appeal of a county tax is not required to be served on the Director of Taxation.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO TAX APPEALS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 232-5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Any protesting taxpayer who would incur a total tax liability, not including penalties and interest, of less than $1,000, by reason of the protested assessment or payment in question, may elect to employ the procedure established by this section upon:

     (1)  Payment per taxpayer of a nonrefundable filing fee set pursuant to rules adopted by the supreme court, which shall not exceed $25; and

     (2) Filing with the tax appeal court a written statement of the facts in the case, together with a waiver of the right to further appeal.

The tax appeal court shall cause a notice of the appeal and a copy of the statement to be served on the director of taxation [and] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county."

     SECTION 2.  Section 232-16, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  A taxpayer or county may appeal directly to the tax appeal court without appealing to the state taxation board of review or any equivalent administrative body established by county ordinance; provided that a taxpayer appealing a real property tax assessment shall first obtain a decision from an administrative body established by county ordinance, before appealing to the tax appeal court, if county ordinance requires a taxpayer to do so.  An appeal permitted by law to the tax appeal court is properly commenced by filing, on or before the date fixed by law for the taking of the appeal, a written notice of appeal in the office of the tax appeal court and by service of the notice of appeal on the director of taxation [and,] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county.  An appealing taxpayer shall also pay the costs in the amount fixed by section 232-22."

     SECTION 3.  Section 232-17, Hawaii Revised Statutes, is amended to read as follows:

     "§232-17  Appeals from taxation board of review to tax appeal court.  An appeal shall lie to the tax appeal court from the decision of the state taxation board of review, or equivalent administrative body established by county ordinance.  An appeal to the tax appeal court shall be properly commenced by the filing, by the taxpayer, county, or director of taxation, of a written notice of appeal in the office of the tax appeal court within thirty days after the filing of the decision of the state taxation board of review or an equivalent county administrative body, and, in the case of any appealing taxpayer, the payment of the costs of court in the amount fixed by section 232-22, and service of the notice of appeal on the director of taxation [and,] in the case of an appeal involving the department of taxation, or on the real property assessment division of the county involved in the case of an appeal [from a decision] involving the county [as a party, the real property assessment division of the county involved.], or upon both the director of taxation and the real property assessment division of the county involved in the case of an appeal involving both the department of taxation and the county.  A notice of appeal shall be sufficient if it states that the taxpayer, county, or director of taxation appeals from the decision of the state taxation board of review or an equivalent county administrative body, to the tax appeal court and may be amended at any time.  The appeal shall bring up for determination all questions of fact and all questions of law, including constitutional questions involved in the appeal.

     In case of an appeal by the county or director of taxation, a copy of the notice of appeal shall be forthwith delivered or mailed to the taxpayer concerned or to the clerk of the county concerned in the manner provided in section 232-7 for giving notice of decisions.

     An appeal shall be deemed to have been taken in time, and properly commenced, if the notice thereof and costs, if any, and the copy or copies of the notice shall have been deposited in the mail, postage prepaid, properly addressed to the tax appeal court, [director of taxation,] taxpayer or taxpayers, and[,] director of taxation or, if relevant, the real property assessment division of the county involved, respectively, within the time period provided by this section."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

Tax Appeals; Service; Director of Taxation

Description:

Clarifies that a notice of appeal relating to an appeal of a county tax is not required to be served on the Director of Taxation.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  1728

Honolulu, Hawaii

                , 2025

RE:   S.B. No. 1467

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Judiciary & Hawaiian Affairs, to which was referred S.B. No. 1467 entitled:

"A BILL FOR AN ACT RELATING TO TAX APPEALS,"

begs leave to report as follows:

     The purpose of this measure is to clarify that a notice of appeal relating to an appeal of a county tax is not required to be served on the Director of Taxation.

     Your Committee received testimony in support of this measure from the Department of Taxation.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that the ambiguity of existing law regarding tax appeals for small claims causes the Director of Taxation to be regularly served with notices of appeal for county taxes, even when the Director is not a party to the appeal.  This measure would clarify the service requirements for county tax appeals, eliminating unnecessary involvement of the Department of Taxation and reducing costs for taxpayers and administrative processing.

     Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1467, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1467, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

STAND. COM. REP. NO. 690

Honolulu, Hawaii

RE:     S.B. No. 1467

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1467 entitled:

"A BILL FOR AN ACT RELATING TO TAX APPEALS,"

begs leave to report as follows:

     The purpose and intent of this measure is to clarify that an appellant need not serve notice of appeal of a county tax on the Director of Taxation.

     Your Committee received testimony in support of this measure from the Department of Taxation.

     Your Committee received comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that clarification of the service requirements for county tax appeals will help eliminate unnecessary processing and review of notices by the Department of Taxation and the Department of the Attorney General.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1467 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,