Hawaii Preparers - GET letters from Tax Office

[taxea]

Have any of you seen the request for GET taxes going back as far as 2001? Apparently the state has found yet another way to get money. They are sending notice letters to GET holders saying they don't have returns filed for "the stated" years and want the taxes paid.
If your clients are coming to you with the letters, how are you handling them?

[Uncle]

Money for me

Have any of you seen the request for GET taxes going back as far as 2001? Apparently the state has found yet another way to get money. They are sending notice letters to GET holders saying they don't have returns filed for "the stated" years and want the taxes paid.
If your clients are coming to you with the letters, how are you handling them?

I prepare all tax returns requested and bill for them. Easy pickings. I sent out a form letter to all clients with C, E, and F and offered to prepare all GE forms in the future. That is usually five returns per year. Pretty good response so far...

[ChEAr$]

Call me curious, but just what is a GET tax?

[Uncle]

Call me curious, but just what is a GET tax?

Hawaii does not have a sales tax. Instead, the State raises about a third of tax collected with an excise tax called the "General Excise Tax". This is a tax on doing business. There are various rates, but most everyone pays 4 or 4.5% of gross revenue. So if you rent out a house for $2000 per month on Oahu, you would owe $1,080 GE tax per year. It does not matter whether or not you have a profit - you pay the GE tax on gross earnings. The GE tax is also imposed on each level. Politicians love it as it is a very easy tax to calculate. Up until a year or so ago, many taxpayers did not bother to report their GE tax payable, hoping that they could fly under the radar. The State of HI now has access to the IRS records of schedules C, E, and F. When the gross amounts of those schedules do not match the taxable amounts on the GE tax forms, well, letters appear. Penalties and interest accrue. In addition, the GE tax is reported not on an annual basis, but rather monthly, quarterly, or semi-annually depending upon the total FE tax owed. The most frequently observed situation is four quarterly GE returns required, due by the 15th? of the following month, and an annual reconciliation form by April 20?. With fillable forms, electronic filing, etc., the work involved in completing GE tax forms is very quick and easy. The State has now hired a throng of additional staff to collect back GE taxes, so most tax preparers have clients urgently needing GE tax forms filed.

[Burke]

This is the same as Business Gross Receipts Tax here. Filed annually to the locality. Except here rental property (Sche E) does not come under the rule. The tax rate varies with the type or classification of business.

[taxea]

Uncle-what do you charge for this service?
I find them a real PITB (Pain in the butt) and don't want to do them.
But this letter the state is sending out is even worse! I think the state should compare lack of the get form against the N11 to determine whether the tp even reported any income subject to GET before they send the letter out and I intend to let Kawafuchi know the eror of their ways.