Daily Tax Report: State

State of Wayfair: Hawaii’s New Business Income Tax Law

July 11, 2019, 6:00 PM

Hawaii has enacted a groundbreaking new law targeting business income.

The Aloha State became the first to modify rules for business income taxes to mirror the sales tax standard in the Wayfair decision. The city of Philadelphia made a similar move in January.

“During the legislative session, we argued that if the State wanted to adopt a Wayfair threshold, it should make that threshold applicable to all tax types,” said Tom Yamachika, president of the Tax Foundation of Hawaii. “Otherwise anomalies are possible, such as a mortgage broker that can’t be subject to our franchise tax while a similar business...

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