Hawaii DOT Issues Guidance on General Excise Tax Treatment of Payments to Payroll Service Providers

The Hawaii Department of Taxation Oct. 10 issued guidance on the general excise tax (GET) treatment of payments made by film production companies to payroll service providers. The guidance clarifies that payroll service providers registered with the Department of Labor and Industrial Relations as professional employer organizations (PEOs) may claim an exemption from GET on amounts disbursed to client companies’ employees, while non-registered payroll service providers must pay GET on all amounts received from production companies. The guidance also states that payments to payroll service providers or PEOs may qualify as production costs eligible for Hawaii’s film production income tax ...