foreign corporation in Hawaii and taxation

[fontrevault]

I am in the process of buying a small business currently located in
Hawaii. My own small company (S-Corp) is a California corporation,
and I am in California. I expect to use the services of a Hawaiian
based warehousing company to warehouse some of the inventory and to
ship orders to Hawaiian based customers. Does this mean I will need
to register as a foreign corporation in Hawaii, and, more importantly,
does this mean I will incur any Hawaii tax? For ex., the GET tax, or
any others. Any advice or even pointing me into the right direction
as to where I might find the info would be much appreciated.

 

[Katie]

I am in the process of buying a small business currently located in
Hawaii.  My own small company (S-Corp) is a California corporation,
and I am in California.  I expect to use the services of a Hawaiian
based warehousing company to warehouse some of the inventory and to
ship orders to Hawaiian based customers.  Does this mean I will need
to register as a foreign corporation in Hawaii, and, more importantly,
does this mean I will incur any Hawaii tax?  For ex., the GET tax, or
any others.  Any advice or even pointing me into the right direction
as to where I might find the info would be much appreciated.

--

Yes, your S corporation will be doing business in Hawaii and will be
required to obtain a Certificate of Authority from the Department of
Commerce and Consumer Affairs. Information and online registration
are available at http://hawaii.gov/dcca/areas/breg/registration/fpc/.

A federal S corporation is exempt from the Hawaii corporate income tax
to the same extent it is exempt from federal income tax; however, an S
corporation doing business in Hawaii must file a return on form N-35.
Individual nonresident stockholders are subject to Hawaii individual
income tax on S corporation income apportioned and allocated to
Hawaii. The corporation will also be subject to the General Excise
and Use Tax, which is essentially a gross receipts tax imposed on
virtually all forms of economic activity in the state. Forms and
information can be found at the Hawaii Department of Taxation web
site, http://hawaii.gov/tax/.

Katie in San Diego