Hawaii Administrative Rules
Title 18 - DEPARTMENT OF TAXATION
Chapter 235 - INCOME TAX LAW
Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES
Section 18-235-29-02 - Apportionment formula; denominator of zero

Universal Citation: HI Admin Rules 18-235-29-02
Current through August, 2024

If the denominator of the property factor, payroll factor, or sales factor is zero, then the denominator of the fraction in section 235-29, HRS, shall be reduced by the number of factors with a zero denominator, and the numerator of that fraction shall not include any factor with a zero denominator.

Example: X is a company that provides data entry services to United States companies. X performs its services exclusively through employees of F, its foreign parent that does no business in the United States. X has no employees of its own. X's property factor is 5 percent, its sales factor is 17 percent, and its payroll factor has a zero denominator. X's apportionment percentage is 11 percent (5 percent plus 17 percent, divided by 2).

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