Hawaii Administrative Rules
Title 18 - DEPARTMENT OF TAXATION
Chapter 235 - INCOME TAX LAW
Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES
Section 18-235-34-01 - Payroll factor; compensation paid in this State

Universal Citation: HI Admin Rules 18-235-34-01

Current through August, 2024

(a) Compensation is paid in this State if any one of the following tests, applied consecutively, is met:

(1) The employee's service is performed entirely within the State.

(2) The employee's service is performed both within and without the State, but the service performed without the State is incidental to the employee's service within the State. In this paragraph, "incidental" means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction.

(3) If the employee's services are performed both within and without this State, the employee's compensation shall be attributed to this State:
(A) If the employee's base of operations is in this State;

(B) If there is no base of operations in any state in which some part of the service is performed, but the place from which the service is directed or controlled is in this State; or

(C) If the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed but the employee's residence is in this State.

(b) As used in sections 235-33 and 235-34, HRS, and the rules thereunder:

"Base of operations" means the place of more or less permanent nature from which the employee starts work and to which the employee customarily returns in order to receive instructions from the taxpayer or communications from customers or other persons or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of the employee's trade or profession at some other point or points.

"Place from which the service is directed or controlled" means the place from which the power to direct or control is exercised by the taxpayer.

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